Photo/Illutration The Tokyo Stock Exchange in Chuo Ward (Asahi Shimbun file photo)

Foreign investors sold Japanese equities for a second straight week through September 20, booking gains from a record-setting rally and keeping the market on course for an 11th consecutive year of net outflows in September.

Japanese stocks witnessed weekly drawdowns worth a net 1.75 trillion yen ($11.69 billion) from overseas after about 2.03 trillion yen worth of net foreign sales in the prior week, Japan’s Ministry of Finance data showed on Friday.

Foreigners have pared holdings of Japanese stocks in September every year since 2015, with the biggest 5.48 trillion yen withdrawal seen in 2023. They have pulled out approximately 3.67 trillion yen so far this month on a net basis.

Foreign investors often trim exposure to Japanese equities in September due to quarter-end rebalancing, seasonal risk aversion, and selective profit-taking after periods of strength.

The Nikkei 225 briefly hit a record high of 45,852.75 last Friday, after the Bank of Japan, in a split decision, kept interest rates unchanged and announced a plan to gradually begin unwinding its holdings of exchange-traded funds and real estate investment trusts.

Foreign activity in Japanese long-term bonds also cooled last week as outsiders bought just 53.3 billion yen worth of securities, a sharp reduction from 1.19 trillion yen net purchase the prior week. Short-term bills, however, attracted 990.4 billion yen worth of foreign inflows.

Japanese investors, meanwhile, snapped up a net 817.2 billion yen in foreign long-term bonds, logging weekly net purchases for a fourth successive week.

They invested just 16.7 billion yen in foreign equities, the smallest amount in four weeks.

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