Japanese investors significantly increased their overseas equities purchases in April, investing a net 3.27 trillion yen ($22.37 billion) in international stocks, the largest monthly total since at least 2005. This spike was fuelled by global market volatility, especially as a result of US tariffs, triggering a shift away from bonds and deliberate portfolio rebalancing. In contrast, 1.08 trillion yen were withdrawn from international bond markets.
Institutional investors withdrew 1.99 trillion yen from long-term debt securities, while a smaller 906.3 billion yen went to short-term instruments. Trust accounts drove the share purchases, investing a record 2.76 trillion yen. Investment trusts also contributed, purchasing 801.4 billion yen in overseas stocks. However, life insurers maintained their net selling trend, dropping 462 billion yen in foreign stocks for the fourth consecutive month.
Investor decisions were influenced in early April by rising US Treasury yields and a bond sell-off, which was caused in part by hedge funds unwinding leveraged positions. Japanese investors also invested 2.12 trillion yen in US equities in March, the largest level since 2014. Meanwhile, international investors put 3.68 trillion yen into Japanese markets in April, the largest monthly inflow in two years.
