Foreign investors have maintained their interest in Japanese stocks for the eighth consecutive week, driven by a rally in AI-related shares and easing oil prices. According to data from Japan’s Ministry of Finance, foreigners invested a net 1.08 trillion yen ($6.77 billion) in Japanese stocks in the week ending May 23, marking a significant increase from the previous week’s 948.4 billion yen.

AI Sector Attracts Investment

The technology sector, particularly companies involved in artificial intelligence, has been a major attraction for investors. Notably, Nvidia’s forecast of strong demand for its AI chips has spurred interest. As a result, AI investor SoftBank Group saw a remarkable 17.62% surge in its stock value last week, while chip designer Socionext experienced a 12.26% rally.

Overall, foreign investors have poured nearly 11.7 trillion yen into Japanese stocks this year, a stark contrast to the 742.1 billion yen recorded during the same period last year.

Bond Market Dynamics

In the bond market, Japanese long-term bonds experienced a net purchase of 1.35 trillion yen, reversing the previous week’s outflows of 1.03 trillion yen. This shift is attributed to a bond selloff easing and higher yields attracting investors. However, there was a significant divestment of 2.22 trillion yen in short-term instruments, the highest since March 28.

Meanwhile, Japanese investors have been withdrawing from foreign equities, with a net sale of 358.7 billion yen, marking their third weekly net sale in four weeks. Despite this, they have continued to invest in long-term foreign bonds, albeit marginally, with a 10.3 billion yen investment, extending their buying streak to four weeks.

The ongoing interest in Japanese stocks, particularly in the AI sector, underscores the global confidence in Japan’s tech industry and its potential for growth.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.