Topix Strengthens, Foreign Funds Reversing Into Japanese Stocks
The Topix index continued its strengthening and headed for its third consecutive session of gains, supported by substantial inflows from foreign investors. Preliminary data from the Japanese Ministry of Finance (MOF) showed that foreign funds booked record net purchases of Japanese stocks last week, bolstering the index.
This buying inflow marked a significant reversal in the second quarter, following an outflow in March when the Iran war triggered a sell-off in risk assets. This shift in capital flows is seen as improving sentiment, as the market perceives a rebound in foreign interest amidst easing selling pressure that had been dominant during the escalation of the conflict.
Technically, the Topix is now only about 3% off its peak recorded in February. The proximity to this peak has the potential to boost market confidence, especially as US stocks are at record highs, contributing to a global risk-on tone.
Looking ahead, market participants are also closely monitoring the policy direction of the Bank of Japan, which is widely expected to hold interest rates this month. The combination of strengthening foreign capital inflows, supportive global sentiment, and stable policy expectations are key factors being monitored to determine whether the Topix rally can continue or begin to lose momentum. (asd)
Source: Newsmaker.id
