Japanese stocks see biggest weekly foreign outflow in 10 months

(Reuters) - Japanese stocks witnessed heavy foreign outflows in the week to July 26, as a strengthening yen and a sell-off in global technology stocks dampened investor sentiment.

Foreign investors net sold Japanese shares worth 1.58 trillion yen ($10.53 billion) in the week, according to exchange data, the largest outflow since the week ended Sept. 29, 2023.

Foreign investors sold derivative contracts worth approximately 1.01 trillion yen in their largest weekly net selling since Oct. 6, 2023. They also divested cash equities of about 1.58 trillion yen.

The Topix index lost 5.64% last week, its steepest weekly decline since March 2020, amid a sell-off in technology shares and a sharp rise in the yen, which raised concerns about the profit outlook for exporters. The Nikkei share average slipped 5.98%.

The yen jumped to around 148.48 per dollar on Thursday, the highest level since March 15 as the Bank of Japan (BOJ) raised interest rates to 15-year highs and announced details on how it will reduce its huge bond buying.

Foreigners, however, purchased long-term Japanese bonds of about 1.2 billion yen following 352.7 billion yen worth of net selling in the previous week as per Ministry of Finance data.

Short-term debt instruments, meanwhile, faced 2.64 trillion yen worth of selling.

Meanwhile, Japanese investors offloaded 700.5 billion yen

worth of long-term overseas bonds, extending net selling to a third week. Conversely, they purchased short-term instruments worth about 14.5 billion yen.

Additionally, Japanese players purchased 230.4 billion yen worth of foreign equities, marking a second weekly net buying.

($1 = 150.0000 yen)

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Varun H K)