Japanese Investors' Overseas Stock Sales Persist in November

Japanese investors continued their trend of selling overseas stocks for the second consecutive month in November, driven by the robust performance of global equities, particularly in the U.S. where stocks reached record highs.

Data from Japan's Ministry of Finance revealed that these investors net sold 1.22 trillion yen ($8.12 billion) worth of overseas stocks last month, following a net withdrawal of about 2.37 trillion yen in October.

Japanese trust accounts divested foreign stocks worth a net 1.33 trillion yen, marking their third consecutive month of net sales. In contrast, investment trust management companies purchased 550.5 billion yen worth of shares, the highest in three months.

Barclays analysts suggested that the significant net sales by trust accounts were likely due to portfolio rebalancing after a strong U.S. equity performance, while the heavy purchases by investment trusts were influenced by renewed interest in new NISA-linked investment flows.

The Nippon Individual Savings Account (NISA) is a Japanese government tax-free stock investment program aimed at encouraging households to invest their cash holdings in stock markets.

According to the Bank of Japan, Japanese investors had sold a net 1.33 trillion yen worth of U.S. equities up to October. They also net sold 412 billion yen and 162.2 billion yen worth of European and British stocks, respectively, in the same period.

Additionally, local investors sold a net 432.8 billion yen worth of debt securities in November, extending net sales into a second successive month, according to Ministry of Finance data.