Japanese investors turned net sellers of foreign equities for the first time in four months in April, as rising concerns over higher energy costs stemming from the Iran conflict and fears of broader inflationary pressures weighed on sentiment toward overseas markets, according to Reuters calculations based on data released by Japan’s Ministry of Finance.
The data showed Japanese investors sold a net 636.4 billion yen worth of foreign stocks during the month, marking the largest monthly net outflow since October 2025. The shift in investment behaviour reflected growing caution among investors amid heightened geopolitical uncertainty and persistent inflation concerns in major global economies.
Selling pressure in foreign bonds, however, moderated significantly. Japanese investors reduced their net sales of overseas bonds to 219.2 billion yen in April, the lowest level recorded in three months.
Investor sentiment was also influenced by fresh inflation data from the United States. The U.S. consumer inflation in April accelerated at its fastest pace in three years, driven by increases across food, services, housing rentals and airline fares. The stronger-than-expected inflation readings reinforced expectations that interest rates could remain elevated for longer, impacting global investment flows.
Among Japanese institutional investors, trust accounts emerged as the largest sellers of foreign equities, pulling out nearly 1.85 trillion yen during the month, the biggest monthly withdrawal since June 2025. At the same time, these accounts increased investments in foreign long-term bonds by 897.3 billion yen.
In contrast, investment trust management companies and life insurers continued to add exposure to overseas equities. Investment trust management firms purchased foreign stocks worth 1.25 trillion yen, while life insurers bought a net 333.1 billion yen during April.
Separate figures released by the Bank of Japan indicated that Japanese investors sold substantial amounts of overseas debt in the first quarter of the year. Holdings of U.S. bonds were reduced by 4.95 trillion yen, while European bond holdings declined by 1.02 trillion yen.
Within Europe, Japanese investors sold French bonds worth 797.66 billion yen and German bonds amounting to 307.65 billion yen during the quarter, highlighting continued caution toward major global debt markets amid uncertainty over inflation and interest rate trends.
