Bank of Japan is expected to maintain near zero interest rate and shows no inclination to raise it
Foreign investors sold JPY 250 billion worth of Japanese stocks in the week ended June 14
Net foreign investment in Japanese stocks has been negative since March 22
Nikkei 225 index dropped 5.6% since reaching an all-time high on March 22
Weak yen has been a driving force behind Japan's economy but concerns about sustainability persist
Japanese Stocks: Global Investors Turn Cautious
The excitement surrounding Japan's share market rally earlier this year has faded as foreign investors, who had previously shown enthusiasm for Japanese stocks, have begun selling them off amidst a sluggish economy. Citigroup Inc., abrdn Plc, and other financial institutions are growing more pessimistic about the nation's equities due to uncertainties regarding corporate governance reform and the Bank of Japan's monetary policy. A survey by Bank of America Corp revealed that a third of respondents believe the market has reached its peak.
Foreign investors unloaded a net JPY 250 billion ($1.6 billion) worth of Japanese stocks in the week ended June 14, according to TSE data. Japan's blue-chip Nikkei 225 index has stalled since reaching an all-time high on March 22, dropping 5.6% since then.
Several strategists remain optimistic about Japan's long-term outlook despite the recent sluggishness of shares. The Bank of Japan (BOJ) is set to maintain its interest rate at near zero and has shown no inclination to raise it, which could impact investors' decisions. Additionally, the weak yen has been a driving force behind Japan's economy, but there are concerns about the sustainability of this trend as domestic investments and wage growth remain low.
In light of these uncertainties and the recent sell-off by foreign investors, it remains to be seen whether Japan's record share market rally was merely a fleeting moment or a sign of sustained growth for the nation's equities.
Foreign investors sold a net ¥250 billion ($1.6 billion) worth of Japanese stocks in the week ended June 14.
Japan's blue-chip Nikkei 225 index has dropped 5.6% since reaching an all-time high on March 22.
Foreigners have become net sellers for a fourth straight week through June 14, the longest streak since September.
Accuracy
Japan’s blue-chip Nikkei 225 index has dropped 5.6% since reaching an all-time high on March 22.
The yen depreciated to approach 160 per dollar, a level it hasn’t touched since April.
Deception
(50%)
The article contains selective reporting as it only reports details that support the author's position about foreign investors selling off Japanese stocks and their concerns about the uncertain outlook for corporate governance reform and the Bank of Japan's monetary policy. The article also uses emotional manipulation by stating that 'foreign investors are now selling, unloading a net ¥250 billion ($1.6 billion) worth of Japanese stocks in the week ended June 14.' This statement creates a sense of urgency and fear, potentially manipulating readers' emotions. The article also uses sensationalism by stating that 'Japan's record share market rally earlier this year is looking like a distant memory.'
Foreign investors became net sellers for a fourth straight week through June 14.
The early optimism for Japanese stocks this year is clearly hitting a speed bump.
We would like to see some floor in terms of the weakening trend of the yen, and that may benefit the domestic economy.
