Net buying of Japanese stocks by foreign investors last week hit the highest since 2014, as rising US yields and a weakening yen underpinned sentiment. Foreign investors, who sold 7.5 trillion yen in the first eight months of 2018, bought 1.4 trillion yen of Japanese cash and futures stocks on a net basis during the week of Sept.18-21, the largest weekly amount since late November 2014, according to data released by the Japan Exchange Group on Friday.
Japanese shares have surged during the month, with the Nikkei share average hitting a 27-year high on Friday. In September alone, the Nikkei jumped 5.5 percent to post the biggest monthly gain since last October, with such laggards as financial shares gaining ground on the back of rising US yields.
The dollar-yen level - which traded above 113.67 to hit a fresh nine-month high on Friday - is raising hopes for a brighter earnings for Japanese companies as well because a weaker yen boosts manufacturers' profits made abroad when repatriated.
"Japanese stocks were lagging behind the rises in the US market, so investors were seen scooping up Japanese stocks," said Takatoshi Itoshima, a strategist at Pictet Asset Management, referring to Wall Street's rally, where the S&P 500 index and the Dow Jones Industrial Average have hit all-time highs this month. Conversely, trust banks, which manage corporate pension trusts and national pension fund trusts, sold a net 136.2 billion yen in Japanese stocks.