Non-residents made a return to net selling of equities in the final week of January, ending a period of net buying that lasted nine consecutive weeks, according to figures released by the Ministry of Finance (MOF) today. Non-residents sold JPY 32.9 billion more equities than they bought in the week of January 24-30, 2010, after buying a net JPY 230.9 billion in equities in the previous week (January 17-23, 2010).
Transactions in medium- and long-term bonds by non-residents moved in a similar direction to their transactions in equities in the last two weeks of January. They sold a net JPY 238.7 billion in the instruments in the week of January 24-30, but were net buyers to the tune of JPY 109.4 billion in the week of January 17-23.
Background
Some market observers have pointed out that the nine-week period of net buying by non-residents was largely the result of relatively short-term factors, such as uncertainty over the prospects for other developed economies and moves by overseas investors to rebalance their portfolios. According to this view, non-residents’ net-buying of equities in general ran out of momentum at the end of January, while a number of Japan-specific factors, such as uncertainty over the future direction of the yen, weakened non-residents’ appetite for Japanese equities.
D.C.