Finance News
By Maheen Hernandez
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Foreign money fled Japanese stocks hard in January. International investors poured just ¥328.
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The drop caught many traders off guard, especially after months of steady foreign buying that had pushed the Nikkei to multi-year highs.
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Bank of Japan Governor Kazuo Ueda kept rates ultra-low at the January 20 policy meeting, but that move seems to have backfired with foreign investors.
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Tokyo's main stock index got hammered throughout January, with wild swings that scared off institutional buyers.
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Nomura analysts think the pullback might be temporary. Maybe they're right.
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Corporate earnings season starts next month, and some big names like SoftBank and Fast Retailing are expected to beat estimates.
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The investment drought comes as Japan's economic recovery shows signs of stalling, with fourth-quarter GDP growth hitting just 0.4% - way below the 0.8% economists had forecast.
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Currency moves made things worse. Daiwa Securities noted on January 22 that the yen's 3% rally against the dollar this month hurt returns for foreign investors, who face exchange…
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And there's the Fed factor too. Jerome Powell's hints about potential rate hikes have global investors rethinking their entire Asia allocation, not just Japan.
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Toyota didn't help sentiment when it cut profit forecasts on January 27, citing weak overseas sales.
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But here's the twist - domestic investors stepped up their buying in January, partially offsetting the foreign exodus.
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Finance Minister Shunichi Suzuki tried to calm nerves on January 29, promising to engage more with international investors and maintain economic stability.
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The International Monetary Fund threw another curveball on January 30, cutting global growth forecasts and warning about trade disruptions that could hit export-dependent…
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Mitsubishi UFJ Financial Group hasn't released its own analysis of the investment trends yet, but their research team typically provides detailed breakdowns of capital flows that…
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The yen traded at 148.50 per dollar Friday, up from 152.20 at the start of January.
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