Relieved foreigners snap up Japanese stocks as markets recover By Reuters

(Reuters) – Foreign investors bought heavily in Japanese stocks in the week to Aug. 10, encouraged by signals from policymakers to stabilize the market following recent turmoil that sent stocks to their biggest one-day drop since 1987.

Cross-border investors bought a net 521.9 billion yen ($3.51 billion) worth of Japanese stocks this week, reversing three straight weeks of net selling, according to Finance Ministry data.

Last week, Japanese policymakers signaled measures to prevent further stock market declines, while the Bank of Japan indicated it would hold rates steady amid market volatility, after a historic 12.4 percent drop in the stock average on August 5, due to fears of a recession. in the US and defunding carry trades with cheap yen.

But those concerns quickly faded, and the Nikkei stock average has risen more than 20 percent since hitting a nine-month low of 31,156.12 on Aug. 5.

Foreigners also reversed an eight-week selling trend in Japanese bonds last week, becoming net buyers. They bought a net 1.44 trillion yen in long-term bonds, the most since May 11, and a net 561.8 billion yen in short-term securities.

Japanese investors bought 1.54 trillion yen of long-term foreign bonds last week, marking the biggest weekly net purchase in 12 weeks, and also bought short-term instruments totaling 453, 5 billion yen.

However, Japanese investors shed a net ¥328.1 billion in foreign stocks after three straight weeks of net buying.

(1 USD = 148.9000 yen)