October 18, 2018 / 9:31 AM / 9 months ago

Foreigners turn net sellers of Japanese stocks in Oct 9-12 week

Oct 18 (Reuters) - Foreigners turned net sellers of Japanese stocks in the week ended Oct. 12, as concerns over rising U.S. yields triggered a broad sell-off in equities across the world.

Last week, overseas investors sold a net 1.83 trillion yen ($16.26 billion) worth of Japanese stocks, including cash equities and futures, data from Japanese stock exchanges showed. The outflows in the last week were the biggest this year, the data showed.

The Topix index fell more than 5 percent last week, its biggest decline since early February, while the Nikkei index also shed 4.5 percent.

Analysts said the Japanese market, which was showing signs of overheating, was prone to profit-taking but after a correction is done, the market should be supported by solid fundamentals.

“Compared to the February sell-off, valuations and positioning are currently supportive, while the outlook for trade friction and the risk of slower growth in the Chinese economy are two areas where conditions have deteriorated,” said Goldman Sachs in a report.

“In our view, the macroeconomic outlook will not deteriorate significantly, we expect the current stock sell-off to be limited, and our main scenario calls for TOPIX to rise to 1,950 over the next 12 months.”

In the last week, Japanese investors bought 81.1 billion yen worth of overseas equities, data from the Ministry of Finance showed. It was their seventh consecutive weekly purchase.

($1 = 112.5100 yen)

Reporting by Patturaja Murugaboopathy and Gaurav Dogra; Editing by Sunil Nair

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