US Investors Shift to Japanese and European Markets as Dollar Assets Waver

$12.4 Trillion Outflow from US by End of April, $10.9 Trillion Inflow to Japan and Europe

US Asset Holders' Portfolio: 62% Stocks, 20% Bonds, 10% Cash

As Trump's tariffs shake US assets and markets, funds that have sold off US assets in recent weeks have been analyzed to have flowed into European and Japanese stocks. ·

According to CNBC on the 7th (local time), Bank of America (BofA) announced that it had investigated where the capital that flowed out of the US in recent weeks was going, and this was the result.

According to the bank's data analysis, in the week leading up to April 30, US investors withdrew $8.9 billion (12.4 trillion won) from US stocks and bought $7.8 billion (10.87 trillion won) of Japanese and European stocks. During this period, $4.4 billion flowed into Japanese stocks and $3.4 billion into European stocks. The inflow into Japanese stocks is the largest since April 2024.

As a sign that investors are showing a risk-taking tendency, BofA stated that last week, $2.3 billion and $3.9 billion were also invested in cryptocurrencies and high-yield bonds, respectively. On the other hand, a total of $6 billion was withdrawn from gold and US Treasuries.

The bank also pointed out that in a survey of individual clients with a total asset size of $3.7 trillion (5,155 trillion won), they have been more concerned about deflation than inflation risks in the US over the past four weeks.

Accordingly, these asset holders are buying utility stocks and low-volatility high-dividend ETFs, which are generally considered 'deflation defense' assets. On the other hand, they are selling 'inflation hedge' assets such as debt securities, inflation-protected Treasuries, and financial sector ETFs.

BofA stated that for the bank's individual clients, 62% of their financial asset portfolios are held in stocks, 20% in bonds, and 12% in cash.

Guest Reporter Kim Jung-ah kja@hankyung.com