Japanese investors turned net sellers of foreign stocks in April for the first time in four months, offloading a net 636.4 billion yen ($4.04 billion) — the largest monthly net sale since October 2025 — as inflation worries and geopolitical tensions rattled sentiment toward overseas equities. Ministry of Finance data released on Wednesday showed a stark reversal from prior months’ buying, with trust accounts pulling out a massive 1.85 trillion yen from foreign stocks, the biggest withdrawal since June 2025. By contrast, investment trust management companies and life insurers remained net buyers, purchasing 1.25 trillion and 333.1 billion yen, respectively.
Foreign bond sales, however, moderated to 219.2 billion yen — the lowest in three months — indicating selective portfolio adjustments. Broader selling pressure was evident: separate Bank of Japan data revealed Japanese investors dumped US bonds worth 4.95 trillion yen and European bonds worth 1.02 trillion yen during the first quarter, including significant reductions in French and German debt.
The moves come as US consumer inflation accelerated in April at the fastest pace in three years, reinforcing fears that persistent price pressures will keep global financial markets on edge. Simultaneously, the Japanese yen remains under pressure, with BNY analysts highlighting that the Bank of Japan’s uncertain normalization path and a continued selloff in Japanese Government Bonds (JGBs) create a volatile environment. Rising JGB yields could attract foreign inflows or, if disorderly, trigger risk aversion and yen selling. The yen’s outlook hinges on BoJ communication, inflation data, and global bond market stability.
