As Japanese stocks rise, foreign capital ends 17 consecutive weeks of net buying, and Japanese insurance companies record a massive sell-off

Zhitong
2025.08.07 08:51
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Against the backdrop of the US-Japan trade agreement boosting the Japanese stock market, foreign investors ended their 17-week buying streak in the Japanese stock market last week, marking the first net sell-off with a selling amount of 189 billion yen. At the same time, Japanese insurance companies also took profits on a large scale, with a net sell-off of 282 billion yen, setting a historical high. The Tokyo Stock Exchange Index reached a record high of 2987.92 points due to strong performance in the US stock market and good corporate earnings reports

According to the Zhitong Finance APP, data from the Japan Exchange Group shows that while the trade agreement between the U.S. and Japan boosted the Japanese stock market, foreign investors ended their 17-week buying streak in the Japanese stock market last week, and Japanese insurance companies took the opportunity to realize profits on the rebound of the Japanese stock market to new highs.

Data shows that foreign investors sold 189 billion yen (approximately 1.3 billion USD) worth of stocks in the week ending August 1, marking the first net sell-off since the end of March, ending the previous 17-week net buying trend. Additionally, Japanese institutional investors also took the opportunity to realize profits. Among them, Japanese insurance companies net sold 282 billion yen worth of stocks, the highest level on record, indicating that they are accelerating the pace of selling cross-shareholdings.

On July 22, the U.S. announced a new tariff agreement with Japan, reducing tariffs on Japanese export goods (including automobiles) from 25% to 15%. This is a positive development for the market, especially considering the challenges previously reported in U.S.-Japan negotiations to lower automobile tariffs. The tariff agreement also includes Japan's $550 billion investment plan in the U.S.

Analysts pointed out that the outcome of the U.S.-Japan tariff agreement was better than expected, particularly regarding tariffs on the automotive industry. The U.S. had previously imposed a 25% tariff on Japanese automobiles, which account for more than 25% of Japan's total exports to the U.S.

It is worth mentioning that on Thursday, due to the strong overnight gains in U.S. stocks, coupled with robust earnings reports from domestic Japanese companies reinforcing expectations for wage growth, the Tokyo Stock Exchange index reached a record high. The index closed up 0.72% at 2987.92 points, marking the third consecutive trading day of gains; it briefly touched a historical high of 2993.21 points during the session.

With the resolution of uncertainties regarding U.S. tariffs, the Japanese stock market is in a relatively positive situation, and there is still room for upward adjustments in corporate earnings per share. Furthermore, the corporate governance reforms led by the TSE (Tokyo Stock Exchange) continue to yield results, improving the quality of listed companies and making the overall market more shareholder-friendly