Japanese Investors Dump Record $34 Billion in Foreign Stocks in One Week

(Bloomberg) -- Japanese investors sold a record amount of foreign stocks last week, offloading a net 3.64 trillion yen ($34 billion) of overseas equity. The figure is almost six times greater than in any previous week.

It wasn’t immediately clear what factors were behind the record selling, with fingers pointed at factors including funds locking in profits as U.S. stocks recovered their losses suffered during the pandemic, as well as the settlement of SoftBank Group Corp.’s disposal of shares in T-Mobile US Inc.

A total of 5.9 trillion yen worth of shares was sold, the most on record, while the amount purchased was broadly similar to the previous week at 2.3 trillion yen, according to data from Japan’s Finance Ministry. Even with last week’s massive offload, Japanese remain net buyers of foreign stocks to the tune of about 1.8 trillion yen in 2020 after purchase of 2.6 trillion yen in 2019.

“Japanese investors have been net buyers of foreign securities for a long time,” said Seiichi Suzuki, a market analyst at Tokai Tokyo Research Institute Co. “It wouldn’t be strange for funds to have taken the opportunity to take profits at the end of first quarter after U.S. stocks and bonds rose.”

One factor behind the outsized withdrawal could be SoftBank’s sale of part of its stake in T-Mobile following its long-delayed merger with Sprint Corp., part of a broader $42 billion push by SoftBank to unload assets. At $21 billion, that would be one of the largest disposals of foreign shares by a Japanese company, with SoftBank’s acquisition of Sprint in 2012 the largest-ever purchase of a foreign company by a Japanese firm at the time.

“Depending on the timing of the contract date, the T-Mobile sale may also be included in the figures,” Suzuki said.

©2020 Bloomberg L.P.