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Japanese stocks hit by third week of foreign outflows as US tariffs deter investors
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Japanese stocks hit by third week of foreign outflows as US tariffs deter investors
Feb 19, 2025 7:54 PM

Feb 20 (Reuters) - Japanese equity markets saw a third

straight week of foreign outflows in the week through February

15, influenced by shifts in U.S. tariff policies and a

strengthening yen that dampened demand for export-dependent

Japanese companies.

Foreigners pulled out a net 352.8 billion yen ($2.34

billion) from Japanese stocks last week following about 384.4

billion yen of net sales in the prior week, according to Japan's

Ministry of Finance data.

Last week, U.S. President Donald Trump raised tariffs on

steel and aluminium to 25%. Trump has imposed or threatened

additional tariffs on goods from China, Mexico, Canada, and

other sectors since his inauguration.

Though Japanese stocks are likely to rise following this

results season, a full-fledged rally is not expected until

April-June, Bank of America said in a note on Thursday.

"With concerns about U.S. tariffs weighing on the market, we

may not have a clearer picture until Apr-Jun. As long as the

external environment remains uncertain, full-year company

guidance is likely to remain conservative, posing a double

burden on Japanese stocks."

Meanwhile, Japanese long-term debt securities attracted a

significant 788.8 billion yen of foreign inflows last week, the

highest in four weeks. However, short-term bills saw 912.8

billion yen of outflows, the biggest weekly net selling by

foreign investors since December 28.

In the international equities markets, Japanese investors

bought a net 345.4 billion yen of securities, partly reversing

1.27 trillion yen of net sales, a week ago.

They also purchased 241 billion yen of long-term and 251

billion yen of short-term foreign bonds, extending the net

buying streak into a second successive week.

($1 = 150.7200 yen)

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