Nikkei surge… U.S. funds also move into Japanese market

Korea Economic Daily

Summary

Goldman Sachs said that the pace of U.S. fund inflows into the Japanese stock market is the fastest since Abenomics.
It said U.S. investors are concentrating purchases on tech and artificial intelligence (AI)-related Japanese stocks.
"Global investors' net holdings of Japanese stocks are still low, leaving room for additional inflows, but there may be a correction due to the Nikkei's sharp rise," it said.

Concentrated buying of tech·AI-related stocks

This year, as the Japanese stock market has shown strength, the number of American investors buying Japanese stocks has increased.

On the 10th, Goldman Sachs said in a report that the pace of U.S. fund inflows into Japan is moving at the fastest level since Abenomics. Bruce Kirk, Goldman Sachs' chief strategist, said, "U.S. investors' participation in the Japanese stock market is the highest since October 2022."

Recently, the Japanese stock market has been on an uptrend. This is attributed to Prime Minister Sanae Takaichi's economic stimulus policies and the rise in the yen·dollar exchange rate. In particular, while the U.S. S&P500 rose 14% this year, the Nikkei index rose about 30%. According to Goldman Sachs, U.S. investors are concentrating purchases on Japanese stocks related to tech and artificial intelligence (AI).

According to Japan Exchange Group, foreign investors bought 284 billion yen (about 3.6 trillion won) worth of Japanese stocks in the spot and futures markets during the last two weeks of last month. Kirk said, "Global investors' net holdings of Japanese stocks remain low, so there is room for further inflows."

However, he advised, "Considering that the Nikkei surged last month, it could enter a correction phase." The Nikkei255 index also surpassed the 50,000 mark for the first time last month.

Reporter Han Myeong-hyeon wise@hankyung.com