(Reuters) -Japanese investors sharply ramped up their overseas equity purchases in April, shifting away from bonds as they rebalanced portfolios amid global market volatility triggered by U.S. tariffs, and capitalizing on discounted international shares.
Japanese investors bought a net 3.27 trillion yen ($22.37 billion) in overseas stocks — the highest monthly total since at least 2005 — while pulling 1.08 trillion yen from foreign bonds, according to Ministry of Finance data released on Monday.
Institutional investors pulled 1.99 trillion yen from long-term debt securities but allocated a net 906.3 billion yen into short-term instruments. Trust accounts led equity purchases with a record 2.76 trillion yen, followed by investment trust firms, which added 801.4 billion yen in foreign stocks.
Life insurers, however, offloaded 462 billion yen in foreign shares, marking a fourth consecutive month of net selling.
U.S. Treasury yields rose in early April as bonds sold off, with hedge funds unwinding leveraged basis trades and overseas investors selling U.S. debt in apparent retaliation for tariffs, amid growing doubts about the safe-haven status of U.S. assets.
Separately, data released by the Bank of Japan on Monday showed Japanese investors pumped 2.12 trillion yen into U.S. equities in March — the most since at least 2014 — while trimming holdings of European stocks by a modest 21.82 billion yen.
Meanwhile, overseas investors snapped up 3.68 trillion yen in Japanese markets in April, the largest monthly inflow in two years.
Analysts suggested that early April buying was likely fuelled by optimism over Japanese companies, driven by corporate reforms, increased confidence in yen stability, and relatively attractive valuations compared with Western markets.
($1 = 146.1500 yen)
(Reporting by Patturaja Murugaboopathy and Gaurav Dogra in Bengaluru; Editing by Sherry Jacob-Phillips)
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