Foreign Investors are Fancying Japanese Stocks Again

Whether front running more easing by the BOJ or taking bets on deep valued Japanese stocks, foreign investors are starting to accumulate Japanese equities once again. The first chart below shows the 12-week moving average of foreign stock investment in Japanese equities and the trend now appears to be solidly positive. The second chart below overlays foreign investment in Japanese stocks with the 1-quarter percent change in the Nikkei. It's clear that foreign participation in the Japanese stock market plays a key role in market performance and so continued foreign investment in Japan is likely to coincide with a rising Nikkei.