Japan stocks draw record foreign inflows on optimism over US-Iran resolution

Japanese stocks attracted record foreign investments in the week through April 11, as expectations that the Iran war could end through negotiations boosted demand for risk assets.

Cross-border investors acquired a net 3.94 trillion yen ($24.87 billion) worth of Japanese stocks, their largest weekly purchase on record, according to Japan's Ministry of Finance data available since January 2005.

The Nikkei 225 .N225, up about 16.6% so far in April, hit a new record of 59,569.25 on Thursday after the Trump administration expressed optimism about reaching a deal to end the war with Iran.

Foreigners have pumped about 6.9 trillion yen into Japanese shares in the last two weeks, broadly reversing a record 7.37 trillion yen of net sales in March.

Seasonal factors also contributed to these recent inflows, as foreigners often shift their holdings from Tokyo to offshore entities in March before the voting rights and dividend entitlements are fixed, and then move them back in April, analysts said.

Japanese long-term bonds attracted a net 707.2 billion yen of foreign funds in a second successive weekly net purchase, as higher yields lured non-native investors.

Meanwhile, overseas equities attracted 255.5 billion yen of Japanese investment, marking an eighth straight week of net purchases.

Japanese investors also allocated a net 696.2 billion yen into foreign long-term bonds, snapping a four-week selloff.

($1 = 158.4400 yen)

Foreign flows into Japanese stocks https://reut.rs/47spgbA

Foreign flows into Japanese debt securities https://reut.rs/46jRa8B

Japanese investments in stocks abroad https://reut.rs/4n6yajq

Japanese investments in overseas debt securities https://reut.rs/4gg1uC8

-Reporting by Gaurav Dogra; Editing by Eileen Soreng/Reuters