35dhh.top.

Last week, retail investors in Japan sold the most cash stocks since November 2013, taking profits after the stock market rebounded strongly to highs of the bubble economy era.

Data from the Japan Exchange Group on Thursday showed that domestic retail investors net reduced their holdings by 1.07 trillion yen ($7.2 billion). Meanwhile, foreign investors increased their holdings by 956 billion yen, the highest level since early June last year.

NLI Research's chief equity strategist, Shingo Ide, said, "It is surprising that retail investors sold over 1 trillion yen worth of stocks," as people had expected new capital inflows from city investment trusts and new tax-free investment account programs (NISA).

Japanese domestic investment trusts also outflowed 120 billion yen. These funds are closely watched as a measure of Japanese retail investors' interest in new NISA investment accounts.

Shingo Ide believes, "As the Nikkei 225 index was fluctuating within a range at the end of last year, retail investors must have been waiting for the index to reach 34,000 points before selling en masse."

Strong international demand has helped the Japanese stock market continue its excellent performance relative to other major stock markets in the new year.

Advertisement

The blue-chip Nikkei 225 index rose to 35,839.65 points last week, up 6.6% for the week, the largest single-week increase since March 2022.

Thanks to favorable factors such as the weakening yen, the prospect of the Bank of Japan ending negative interest rates, and the Tokyo Stock Exchange promoting corporate governance improvements, both the Topix index and the Nikkei 225 index have reached their highest levels in 34 years.

SMBC Nikko Securities' chief equity strategist, Hikaru Yasuda, wrote in a report that the Nikkei 225 index may reach a historical high of 40,000 points by the middle of this year.He believes that although the recent rise in the index is similar to the rebound in April-June 2023, its upward momentum is now stronger, and overseas pension funds and sovereign funds are playing a "long game".

On Thursday, the Nikkei 225 index remained almost unchanged compared to the previous trading day, closing at 35,466.17 points.

Masayuki Otani, Chief Market Strategist at a Japanese securities firm, said: "Retail investors are taking profits at this stage, but they are very likely to buy on dips."