Foreign buying of Japanese stocks climbs amid AI demand optimism

Foreign investors continued buying Japanese equities for an eighth consecutive week through May 23, supported by easing oil prices and growing optimism around artificial intelligence-related shares.

According to data released by Japan’s Ministry of Finance on Thursday, foreign investors purchased a net 1.08 trillion yen ($6.77 billion) worth of Japanese stocks during the week ended May 23.

The figure marked an increase of nearly 14% from the previous week’s net purchases of 948.4 billion yen.

The latest inflows extended a strong trend in overseas buying this year as investors increased exposure to Japanese equities amid improving sentiment in technology and AI-linked sectors.

AI-related shares attract strong foreign demand

Technology stocks remained a major focus for investors after chip giant NVIDIA Corporation projected robust demand for its flagship AI chips last week.

The upbeat outlook from Nvidia boosted investor confidence in companies linked to artificial intelligence and semiconductor development.

AI-focused investment company SoftBank Group climbed 17.62% during the week, reflecting strong investor appetite for AI-related assets.

Meanwhile, chip designer Socionext rallied 12.26% over the same period.

The strong performance in technology stocks helped lift overall foreign interest in Japanese equities, adding to an already significant rise in overseas investment this year.

Data showed that foreign investors have injected nearly 11.7 trillion yen into Japanese stocks so far in 2026.

In comparison, foreign investors had purchased a net 742.1 billion yen during the same period last year.

Long-term Japanese bonds record inflows

Japanese long-term government bonds also attracted foreign investment during the week.

Foreign investors purchased a net 1.35 trillion yen worth of long-term Japanese bonds after recording outflows of 1.03 trillion yen in the previous week.

The rebound in bond inflows came as a recent selloff in the bond market eased and higher yields attracted investors seeking better returns.

However, foreign investors reduced exposure to short-term Japanese debt instruments.

Data showed foreigners sold a net 2.22 trillion yen of short-term instruments during the week, marking the largest weekly divestment since March 28.

Japanese investors cut exposure to foreign equities

At the same time, Japanese investors continued to reduce holdings in overseas equities.

Japanese investors sold a net 358.7 billion yen worth of foreign stocks during the week, marking their third weekly net sale in the past four weeks.

Despite the decline in overseas equity investments, Japanese investors continued buying foreign long-term bonds.

They purchased a net 10.3 billion yen worth of long-term foreign debt securities, extending their buying streak to a fourth consecutive week.

The data reflected a mixed investment pattern among Japanese investors as they reduced exposure to foreign equities while maintaining selective interest in overseas bonds.