October 12, 2018 / 9:03 AM / 7 days ago

Foreigners bought Japan stocks for 4th straight week in week ending Oct 5

Oct 12 (Reuters) - Foreigners were net buyers of Japanese stocks for the fourth consecutive week through October 5, despite the sharp declines in the country’s stock markets last week.

Last week, overseas investors bought a net 440.13 billion yen ($3.92 billion) worth of Japanese stocks, including cash equities and futures, data from Japanese stock exchanges showed. That compares with their net sales of 5.94 trillion yen for the year.

Japanese shares had registered strong gains in September, however their major stock indexes have fallen sharply since the start of this month.

The Nikkei index lost 1.4 percent last week, while the Topix index shed 1.35 percent.

“Although the rally in the stock market lost steam in the first week of October, buying interest seems to have improved. Caution is warranted over higher US long-term interest rates causing negative ripple effects and increased selling pressure,” said Daiwa Securities in a report.

The yield on 10-year U.S. notes touched a seven-year high of 3.261 percent this week, bolstered by strong U.S. economic data and expectations of further rate increases by the Federal Reserve.

“Given that nominal GDP growth in the U.S and Japan is significantly higher than long-term interest rates, excessive concerns appear unwarranted in the light of fundamentals,” the report said.

In the last week, Japanese investors bought 189.5 billion yen worth of overseas equities, data from Ministry of Finance showed. It was their sixth consecutive weekly purchase.

Japanese investors have bought 7.24 trillion yen in overseas equities so far this year. ($1 = 112.4800 yen)

Reporting By Patturaja Murugaboopathy and Gaurav Dogra

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