BoJ Overtakes Foreign Investors

The Bank of Japan has surpassed overseas investors to become the largest net buyer of Japanese stocks since the launch of Abenomics in late 2012, suggesting the market’s heavy dependence on the central bank. Foreigners bought about 12 trillion yen ($111 billion at current rates) more in Japanese stocks than they sold between November 2012 and the end of March 2018, according to Tokyo Stock Exchange operator Japan Exchange Group. The BoJ purchased about 18 trillion yen in exchange-traded funds over this period, central bank data shows, Nikkei reported. The stock market rally under Abenomics, the signature economic program of Prime Minister Shinzo Abe, was initially driven by bullish overseas investors. But they began pulling back in mid-2015, with net stock purchases since November 2012 peaking at more than 20 trillion yen that May. Net sales by foreign investors came to 625.5 billion yen last fiscal year. Japanese stocks look like a relative bargain, said Emmanuel Bourdeix, CEO of Seeyond, part of the Natixis group, based in France. But fears of a global economic slowdown and uncertainty about the pace of US interest rate hikes have spurred a sharp drop in overall stock weightings, he said.