Net sales of 2.72 trillion yen mark the largest foreign equity withdrawal by Japanese investors since April 2021.
Japanese investors sold a net 2.72 trillion yen ($16.98 billion) in foreign stocks in May, the largest monthly exit in nearly five years. The selloff followed concerns over Middle East tensions and a perceived overvaluation in tech-driven global equities, which pulled the MSCI World Index down 2.9% this month after hitting record highs last week.
Trust accounts led the divestment, offloading 3.38 trillion yen in foreign equities while shifting 3.16 trillion yen into overseas bonds. Meanwhile, life insurers and investment trusts bucked the trend, purchasing 77.5 billion yen and 614.6 billion yen in foreign stocks, respectively. Earlier data showed Japanese investors had accumulated 1.91 trillion yen in U.S. stocks and 826.4 billion yen in European equities in the first four months of the year.
The shift reflects heightened risk aversion amid macroeconomic uncertainty, with U.S. jobs data sparking volatility in AI-linked technology shares.