A man passes an electronic board on April 7, 2025, which shows the Nikkei 225 index on the Tokyo Stock Exchange along a street in Tokyo.
Kazuhiro Nogi | AFP | Getty pictures
In April, Japan recorded record foreigners in his shares and long -term bonds when the investors fled to friends and enemies equally according to President Donald Trump's trade.
In April, foreign investors bought shares and long-term bonds of $ 8.21 trillion ($ 56.6 billion). According to Morningstar, the net inflows were the largest for a calendar month since Japan's Ministry of Finance started collecting data in 1996.
“Trump -Tariflocks have probably changed the prospects of global investors in the US economy and the performance of the US assets, which probably led to a diversification from the USA to other important markets, including Japan,” said Yujiro Goto, head of the FX strategy from Nomura in Japan.
Now that the United States alleviates its trade and striking business, including China, the confidence in the US assets is being restored. What is that for Japanese assets?
It was a fairly extraordinary month to consider everything that happened in the Macro global economic environment.
Okahura
Neuberger Berman
According to the ministry's data, most of the 8.21 trillion Yen Net inflows also appeared in the first week right after April 2.
After the announcement of Trump tariffs Trump, which increased the 10-year US financing of 30 basis points (April 3 to 9), 10-year-old Japan's 10-year return fell by 21 basis points (April 2 to April).
While shares worldwide recorded a sale immediately after Trump tariffs, Japan's Nikkei 225 rose over 1%over 1%compared to the full month S&P 500that fell around 1%.
Japanese assets are generally regarded as a port, the calling of which was created in April as a “Sell -Us” nursence, said Rashmi Garg, Senior Portfolio Manager at Al Dhabi Capital.
The inflow was driven by institutional investors rather than retail investors, said Nomuras Goto. Pension funds and other asset managers probably bought shares aggressively, while Japanese bond purchases were largely powered by reserve managers, life insurers and pension funds, according to Nomura.
“It was a fairly extraordinary month to consider everything that happened in the global economic environment of the macros,” said Kei Okamura, MD and Japanese stock portfolio manager of Neuberger Berman.
“This obviously had an impact on how global investors should think about the assignment of assets to the United States … they had to diversify,” he said in a phone call to CNBC.
The street ahead
Al Dhabi Capital from Al Dhabi Capital expects the inflows in view of the breakthrough in the collective bargaining discussions in the USA and the tariff and business with other countries. Great Britain was indeed the first country to make a deal with the USA ink last week.
While historical monthly inflows may not continue, market observers still have positive prospects for Japanese assets and continue to see strong tributaries.
Trump's unprecedented actions and political flip-flops have affected the credibility and trust of the US assets in his assets, and this could continue to lead to global fund managers investing less in the US markets in favor of others, explained Vasu Menon, managing director of OCBC, director of the investment strategy team.
“Against this background, the demand for Japanese assets can remain healthy, even if it is not as strong as the April level,” he said. Japan's ongoing talks with the USA in relation to tariffs have also increased a certain optimism about increasing the 24% “mutual” tariffs in Japan, Menon said.
The Japanese stocks will also benefit from the Corporate Governance reforms of the Tokyo Stock Exchange that the shareholder yields prioritized, wrote Asset Management One International.
The corporate governance reforms of the TSE, which started in March 2023, are liable for companies whose shares are under a price-book ratio of action to “comply with or explain”. The initiative aims to increase Japan Inc. for both foreign and domestic investors.
This reform program has led to a probable record level of share purchases in Japan, which improves both the result per share and the share price, said Asset Management One International.
While the dollar gained some strength again after the sale in April, the potential to continue to weaken, and the Japanese currency to strengthen “” sense “, is to consider Japanese shares, especially when the economy is weakening, said Neuberger Berman's Okamura.
“So this trend has legs. Japan will probably continue to see good rivers,” said Okamura.
The Equity Research -Analyst by Morningstar, Michael Makdad, sees more net inflows in Japanese stocks than in the last decade under the improved corporate governance.
Nevertheless, he does not see the same weight of net inflows in short-term Japanese financial statements as the Bank of Japan negative interest rates as an arbitrage opportunity for some foreign investors that existed at the time.
Comments are closed.