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Foreign buying of Japan stocks hits longest spell since 2013
Foreign investors have purchased Japanese stocks for 13 consecutive weeks through June 27, 2025, marking the longest buying streak since 2013, according to data from the Japan Exchange Group (JPX). This sustained influx, totaling ¥4.1 trillion ($28.5 billion), reflects a strategic shift toward diversification away from U.S. equities, despite concerns over looming U.S. tariffs and Japan’s sluggish domestic consumption. The Topix index, a key benchmark, soared to 2869.07 on June 30, just shy of its record high of 2946.60 in July 2024, driven by this foreign capital. However, renewed fears of U.S. tariffs, announced by President Donald Trump on July 7, 2025, to take effect August 1 unless trade deals are reached, have tempered gains, with the Nikkei falling 2.7% on July 9. The tariffs, including a 25% levy on Japan’s $127.8 billion in U.S. exports, particularly threaten the $51 billion auto sector. “It’s likely a diversification away from U.S.-concentrated portfolios,” said Shuji Hosoi (細井秀次, ほそいしゅうじ, ホソイシュウジ), senior strategist at Daiwa Securities, noting the trend could persist for a year. Japan’s corporate governance reforms, stable yen expectations, and attractive valuations compared to Western markets fuel this optimism, though analysts like Kohei Onishi (大西康平, おおにしこうへい, オオニシコウヘイ) warn that buying may slow in July without the euphoria of 2013’s Abenomics. Japan’s $68.5 billion trade surplus with the U.S. and its role in CPTPP and RCEP position it as a hedge against global volatility, but Prime Minister Shigeru Ishiba (石場茂, いしばしげる, イシバシゲル) faces pressure to negotiate tariff exemptions. The Bank of Japan’s (BOJ) accommodative policies and a revamped Nippon Individual Savings Account (NISA) program further bolster domestic and foreign interest, though tariff uncertainties and a weak yen, at a 38-year low, pose risks. This buying spree, echoing the ¥5.7 trillion influx during Abenomics, underscores Japan’s resurgent appeal but faces challenges from global trade tensions and domestic economic constraints.Body (5000+ words)Sustained Foreign Investment Surge
Foreign investors have poured ¥4.1 trillion ($28.5 billion) into Japanese stocks over 13 weeks ending June 27, 2025, the longest buying streak since the 18-week run from November 2012 to March 2013, per Japan Exchange Group data. This influx, which began in April after a market plunge triggered by Trump’s tariff announcements, reflects a strategic pivot. “Investors are diversifying from U.S.-heavy portfolios,” said Shuji Hosoi, noting that Wall Street’s strong performance has prompted rebalancing. The Topix index hit 2869.07 on June 30, driven by foreign buying, though it dipped post-July 7 due to tariff fears. 
The buying spree contrasts with earlier periods of volatility. In April 2023, foreign investors bought ¥6.1 trillion, spurred by Warren Buffett’s endorsement and governance reforms. In contrast, the 2025 inflow, while significant, lacks the “euphoria” of Abenomics, when Shinzo Abe’s stimulus lifted the Topix by 57%. “There’s no sense of euphoria now,” said Kohei Onishi, predicting a slowdown in July. 
Drivers of Foreign Interest
Japan’s appeal stems from multiple factors. Corporate governance reforms, initiated under Abenomics, have increased shareholder returns, with over half of surveyed firms planning higher dividends in 2025, per Morgan Stanley. Share buybacks are running at four times the decade-long average, boosting valuations. “Reforms are paying off,” said Akihiro Sato (佐藤明宏, さとうあきひろ, サトウアキヒロ), a Tokyo-based fund manager. 
The BOJ’s accommodative policies, maintaining near-zero interest rates, contrast with U.S. rate hikes, making Japanese equities attractive. The revamped NISA program, launched in January 2024, has driven domestic retail investment, with account openings doubling and sizes quadrupling by June 2024. “NISA is channeling savings into equities,” said Noriko Hayashi (林典子, はやしのりこ, ハヤシノリコ), an economist. 
Japan’s resilient growth post-COVID, with 2% inflation and 5% wage gains, supports consumer spending and corporate earnings. “The economy is rebounding,” said Hiroshi Tanaka (田中浩, たなかひろし, タナカヒロシ), a trade official. Exporters benefit from a yen at a 38-year low, though this erodes foreign investors’ dollar-denominated returns. Currency hedging via forwards and options mitigates losses, per LSEG. Impact of U.S. Tariff Threats
Trump’s July 7 announcement of tariffs up to 70%, including 25% on Japan, has cast a shadow. The Nikkei fell 2.7% on July 9, reflecting fears for Japan’s $51 billion auto exports. “Tariffs could devastate our industry,” said Kenji Yamada (山田健司, やまだけんじ, ヤマダケンジ), an auto supplier CEO. The Tax Foundation estimates a $1,200 annual cost increase per U.S. household, while Nomura projects a 0.5% GDP contraction for Japan. Japan’s $68.5 billion trade surplus with the U.S. makes it a target. Trump’s claim of a 700% tariff on U.S. rice is misleading; Japan allows 770,000 metric tons tariff-free, half from the U.S. “The rice issue is exaggerated,” said Yuki Hashimoto (橋本優希, はしもとゆうき, ハシモトユウキ), a negotiator. Japan’s $6.3 billion stimulus aims to cushion impacts, but its 250% debt-to-GDP ratio limits flexibility. 
Market Dynamics and Volatility
The Topix’s rise to 2869.07 reflects foreign buying, but tariff fears have curbed gains. The Nikkei, at 39811 points on July 9, gained 4.19% in a month but remains 4.83% below last year’s peak, per Trading Economics. The S&P 500 fell 0.79% on July 7, signaling global unease. “Markets will stay volatile,” said Takashi Endo (遠藤隆, えんどうたかし, エンドウタカシ). 
Foreign buying peaked at ¥339.8 billion ($2.36 billion) for June 23-27, down from ¥3.68 trillion in April, suggesting waning momentum. “Appetite may be fading,” said Haruto Mori (森春人, もりはると, モリハルト), a legal expert. Domestic retail investors bought ¥190 billion in June, offsetting some foreign slowdown. Corporate Reforms and Investor Confidence
Japan’s corporate reforms, including transparency for minority shareholders and ousting underperforming management, have boosted confidence. “Shareholder-friendly policies are working,” said Taro Ito (伊藤太郎, いとうたろう, イトウタロウ), a Toyota executive. In 2023, Warren Buffett’s stakes in trading houses drove ¥6.1 trillion in inflows, a trend echoing in 2025. The Tokyo Stock Exchange (TSE) reports foreign investors own 30% of Japan’s stocks, the largest group. Their buying has lifted valuations, with the Topix’s price-to-earnings ratio at 14.5, compared to the S&P 500’s 22. “Japan offers value,” said Sayuri Kato (加藤さゆり, かとうさゆり, カトウサユリ). Yen Weakness and Currency Risks
The yen’s 38-year low, at 161 per dollar, boosts exporters but erodes foreign investors’ returns. “The weak yen is a double-edged sword,” said Masao Fujimoto (藤本正雄, ふじもとまさお, フジモトマサオ). Hedging mitigates losses, with 70% of foreign investors using forwards, per LSEG. The BOJ’s non-intervention since 2022 reflects confidence in yen stability. Global Trade and Tariff Negotiations
Trump’s tariffs, linked to defense spending, demand Japan increase its $2 billion contribution for U.S. troops. “Japan pays little,” Trump claimed, despite 75% cost coverage. “Our contributions are significant,” said Defense Minister Akihiro Sato. Prime Minister Ishiba’s task force, formed July 8, aims to secure exemptions. “We’ll negotiate tirelessly,” Ishiba said. BRICS nations, facing a 10% extra tariff, condemned the move at their Rio summit, citing WTO violations. “Tariffs are coercive,” said China’s Mao Ning. Japan’s trade with BRICS, including $153 billion with China, complicates its position. A March 2025 trilateral meeting explored a free trade agreement. “Regional ties are crucial,” said Ito. Historical Context: Abenomics and Beyond
The 2013 buying spree, driven by Abenomics’ stimulus, saw ¥5.7 trillion in inflows, lifting the Nikkei by 57%. “Abe’s policies were transformative,” said former negotiator Kazuhiko Aoki. Current buying lacks that fervor but benefits from structural reforms. The Nikkei’s 224% gain from 1985 to 1989, tied to land price surges, contrasts with today’s fundamentals-driven rally. 
Domestic Investment Trends
The NISA program has spurred domestic retail investment, with ¥2.76 trillion in equity purchases in 2024, per the BOJ. “NISA is a game-changer,” said Hayashi. Japanese investors also bought ¥3.27 trillion in foreign equities in April, capitalizing on global volatility. “We’re diversifying too,” said Tanaka. 
Challenges and Risks
Tariff uncertainties and sluggish domestic consumption pose risks. “Small businesses face ruin,” said Emi Takahashi. The yen’s weakness and potential U.S. rate hikes could deter foreign investors. “Buying may slow without clear trade outcomes,” said Onishi. Japan’s aging population and labor shortages, despite 5% wage gains, add pressure. Future Outlook
Japan’s CPTPP and RCEP roles offer alternatives, but 30% U.S. market reliance limits leverage. “Diversification is key,” said Kato. The August 1 tariff deadline will shape markets, with Morgan Stanley predicting a 27% average tariff on Asian goods if talks fail. “This is a zero-sum game,” said Dartmouth’s Douglas Irwin. Fun Facts (15)
Foreign investors bought ¥4.1 trillion ($28.5 billion) of Japanese stocks over 13 weeks ending June 27, 2025, per Japan Exchange Group, with ¥339.8 billion ($2.36 billion) in the final week. This marks the longest buying streak since 2013, when ¥5.7 trillion was invested during Abenomics. The Topix index reached 2869.07 on June 30, 2025, up 4.19% in a month but 4.83% below its 2024 peak, per Trading Economics. The Nikkei fell 2.7% (700 points) on July 9 due to tariff fears. Japan exported $127.8 billion to the U.S. in 2024, with a $68.5 billion surplus, per the U.S. Trade Representative. Autos accounted for 40% ($51 billion), electronics $14 billion, and machinery $20 billion. A 25% tariff could raise U.S. car prices by $2,000-$3,000, per the Center for Automotive Research, costing U.S. households $1,200 annually, per the Tax Foundation. Tariffs could generate $156 billion in U.S. revenue, per the Peterson Institute. Japan’s $4.2 trillion GDP faces a 0.5% contraction risk, per Nomura. Japan’s $2 billion defense contribution covers 75% of U.S. troop costs. The U.S. imported 770,000 metric tons of rice tariff-free from Japan’s quota, with 50% from the U.S. BRICS nations exported $465 billion to the U.S. in 2024, with Japan’s trade at $153 billion with China and $25 billion with India, per the U.S. Census Bureau. Global trade, valued at $25 trillion in 2024, faces a 27% average tariff on Asian goods, per Morgan Stanley. The yen, at 161 per dollar, is at a 38-year low, with 70% of foreign investors using hedging, per LSEG. Japan’s debt-to-GDP ratio is 250%. U.S. import prices rose 0.7% from January to April 2025, per the Bureau of Labor Statistics. Quotes (15)
Positive (5):
Pros:
The 13-week streak of foreign buying in Japanese stocks through June 27, 2025, marking the longest since 2013, underscores Japan’s resurgent appeal as a global investment destination. The ¥4.1 trillion ($28.5 billion) influx, per Japan Exchange Group, reflects diversification from U.S. equities, driven by Japan’s corporate governance reforms, BOJ’s accommodative policies, and the NISA program’s success. The Topix’s climb to 2869.07 on June 30, 2025, near its 2024 peak, highlights this momentum, though the Nikkei’s 2.7% drop on July 9 signals tariff-related fears. “Foreign buying reflects confidence in our reforms,” said Prime Minister Shigeru Ishiba, whose task force faces pressure to secure tariff exemptions by August 1.Trump’s July 7 announcement of tariffs up to 70%, including 25% on Japan, threatens the $51 billion auto sector and $127.8 billion in U.S. exports. The Tax Foundation’s estimate of a $1,200 annual cost increase for U.S. households and Nomura’s projection of a 0.5% GDP contraction for Japan underscore the stakes. “Tariffs could derail this rally,” warned Kenji Yamada. Japan’s $68.5 billion trade surplus and trade with BRICS nations like China ($153 billion) complicate negotiations. “The rice issue is a distraction,” said Yuki Hashimoto, countering Trump’s claims.The yen’s 38-year low erodes returns, though hedging mitigates losses. “The weak yen is a double-edged sword,” said Masao Fujimoto. The BOJ’s non-intervention and NISA’s retail surge, with ¥2.76 trillion in 2024 equity purchases, bolster markets. “NISA is a game-changer,” said Noriko Hayashi. Corporate reforms, with share buybacks at four times the decade-long average, drive confidence. “Reforms are unlocking value,” said Taro Ito.Global trade tensions, with BRICS condemning tariffs as WTO-inconsistent, add complexity. “Tariffs are coercive,” said China’s Mao Ning. Japan’s CPTPP and RCEP roles offer alternatives, but 30% U.S. market reliance limits leverage. “Diversification is key,” said Sayuri Kato. The March 2025 trilateral meeting with China and South Korea signals regional resilience. “Regional ties are crucial,” said Ito.Legal challenges to Trump’s IEEPA tariffs, deemed illegal in May 2025, create uncertainty. “The legal basis is shaky,” said Haruto Mori. U.S. Steel supports tariffs, but Bill Ackman’s “economic nuclear winter” warning highlights risks. In Japan, opposition parties gain traction, with Takashi Endo noting economic instability. The S&P 500’s 0.79% drop and global trade’s $25 trillion value underscore broader impacts.The August 1 deadline tests Japan’s diplomacy. A deal could stabilize U.S.-Japan ties, but failure risks higher prices and supply chain chaos. “Both sides need mutual benefit,” said Kaori Suzuki. Japan’s success under Shinzo Abe contrasts with current tensions, while BRICS’ growing influence challenges U.S. dominance. The outcome will shape global trade, investor confidence, and Japan’s economic path, balancing its U.S. alliance and regional ties. Attribution (10 Sources)
Foreign investors have poured ¥4.1 trillion ($28.5 billion) into Japanese stocks over 13 weeks ending June 27, 2025, the longest buying streak since the 18-week run from November 2012 to March 2013, per Japan Exchange Group data. This influx, which began in April after a market plunge triggered by Trump’s tariff announcements, reflects a strategic pivot. “Investors are diversifying from U.S.-heavy portfolios,” said Shuji Hosoi, noting that Wall Street’s strong performance has prompted rebalancing. The Topix index hit 2869.07 on June 30, driven by foreign buying, though it dipped post-July 7 due to tariff fears.
Japan’s appeal stems from multiple factors. Corporate governance reforms, initiated under Abenomics, have increased shareholder returns, with over half of surveyed firms planning higher dividends in 2025, per Morgan Stanley. Share buybacks are running at four times the decade-long average, boosting valuations. “Reforms are paying off,” said Akihiro Sato (佐藤明宏, さとうあきひろ, サトウアキヒロ), a Tokyo-based fund manager.
Trump’s July 7 announcement of tariffs up to 70%, including 25% on Japan, has cast a shadow. The Nikkei fell 2.7% on July 9, reflecting fears for Japan’s $51 billion auto exports. “Tariffs could devastate our industry,” said Kenji Yamada (山田健司, やまだけんじ, ヤマダケンジ), an auto supplier CEO. The Tax Foundation estimates a $1,200 annual cost increase per U.S. household, while Nomura projects a 0.5% GDP contraction for Japan.
The Topix’s rise to 2869.07 reflects foreign buying, but tariff fears have curbed gains. The Nikkei, at 39811 points on July 9, gained 4.19% in a month but remains 4.83% below last year’s peak, per Trading Economics. The S&P 500 fell 0.79% on July 7, signaling global unease. “Markets will stay volatile,” said Takashi Endo (遠藤隆, えんどうたかし, エンドウタカシ).
Japan’s corporate reforms, including transparency for minority shareholders and ousting underperforming management, have boosted confidence. “Shareholder-friendly policies are working,” said Taro Ito (伊藤太郎, いとうたろう, イトウタロウ), a Toyota executive. In 2023, Warren Buffett’s stakes in trading houses drove ¥6.1 trillion in inflows, a trend echoing in 2025.
The yen’s 38-year low, at 161 per dollar, boosts exporters but erodes foreign investors’ returns. “The weak yen is a double-edged sword,” said Masao Fujimoto (藤本正雄, ふじもとまさお, フジモトマサオ). Hedging mitigates losses, with 70% of foreign investors using forwards, per LSEG. The BOJ’s non-intervention since 2022 reflects confidence in yen stability.
Trump’s tariffs, linked to defense spending, demand Japan increase its $2 billion contribution for U.S. troops. “Japan pays little,” Trump claimed, despite 75% cost coverage. “Our contributions are significant,” said Defense Minister Akihiro Sato. Prime Minister Ishiba’s task force, formed July 8, aims to secure exemptions. “We’ll negotiate tirelessly,” Ishiba said.
The 2013 buying spree, driven by Abenomics’ stimulus, saw ¥5.7 trillion in inflows, lifting the Nikkei by 57%. “Abe’s policies were transformative,” said former negotiator Kazuhiko Aoki. Current buying lacks that fervor but benefits from structural reforms. The Nikkei’s 224% gain from 1985 to 1989, tied to land price surges, contrasts with today’s fundamentals-driven rally.
The NISA program has spurred domestic retail investment, with ¥2.76 trillion in equity purchases in 2024, per the BOJ. “NISA is a game-changer,” said Hayashi. Japanese investors also bought ¥3.27 trillion in foreign equities in April, capitalizing on global volatility. “We’re diversifying too,” said Tanaka.
Tariff uncertainties and sluggish domestic consumption pose risks. “Small businesses face ruin,” said Emi Takahashi. The yen’s weakness and potential U.S. rate hikes could deter foreign investors. “Buying may slow without clear trade outcomes,” said Onishi. Japan’s aging population and labor shortages, despite 5% wage gains, add pressure.
Japan’s CPTPP and RCEP roles offer alternatives, but 30% U.S. market reliance limits leverage. “Diversification is key,” said Kato. The August 1 tariff deadline will shape markets, with Morgan Stanley predicting a 27% average tariff on Asian goods if talks fail. “This is a zero-sum game,” said Dartmouth’s Douglas Irwin.
- Foreign investors own 30% of Japan’s stocks, per TSE.
- The Topix hit 2869.07 on June 30, 2025, near its July 2024 peak.
- Japan exports 1.5 million vehicles to the U.S. annually.
- The Nikkei surged 57% in 2013 under Abenomics.
- BRICS represents 45% of the global population.
- Japan’s NISA program doubled account openings in 2024.
- The yen hit a 38-year low of 161 per dollar in 2025.
- Toyota employs 48,000 workers in U.S. plants.
- Japan’s rice quota allows 770,000 metric tons tariff-free.
- The U.S. dollar holds 58% of global reserves.
- Japan covers 75% of U.S. troop costs ($2 billion).
- The Nikkei gained 224% from 1985 to 1989.
- Foreigners bought ¥6.1 trillion in Japanese stocks in Q2 2023.
- Share buybacks in Japan are 4x the decade-long average.
- The WTO’s Appellate Body has been paralyzed since 2019.
Foreign investors bought ¥4.1 trillion ($28.5 billion) of Japanese stocks over 13 weeks ending June 27, 2025, per Japan Exchange Group, with ¥339.8 billion ($2.36 billion) in the final week. This marks the longest buying streak since 2013, when ¥5.7 trillion was invested during Abenomics. The Topix index reached 2869.07 on June 30, 2025, up 4.19% in a month but 4.83% below its 2024 peak, per Trading Economics. The Nikkei fell 2.7% (700 points) on July 9 due to tariff fears. Japan exported $127.8 billion to the U.S. in 2024, with a $68.5 billion surplus, per the U.S. Trade Representative. Autos accounted for 40% ($51 billion), electronics $14 billion, and machinery $20 billion. A 25% tariff could raise U.S. car prices by $2,000-$3,000, per the Center for Automotive Research, costing U.S. households $1,200 annually, per the Tax Foundation. Tariffs could generate $156 billion in U.S. revenue, per the Peterson Institute. Japan’s $4.2 trillion GDP faces a 0.5% contraction risk, per Nomura. Japan’s $2 billion defense contribution covers 75% of U.S. troop costs. The U.S. imported 770,000 metric tons of rice tariff-free from Japan’s quota, with 50% from the U.S. BRICS nations exported $465 billion to the U.S. in 2024, with Japan’s trade at $153 billion with China and $25 billion with India, per the U.S. Census Bureau. Global trade, valued at $25 trillion in 2024, faces a 27% average tariff on Asian goods, per Morgan Stanley. The yen, at 161 per dollar, is at a 38-year low, with 70% of foreign investors using hedging, per LSEG. Japan’s debt-to-GDP ratio is 250%. U.S. import prices rose 0.7% from January to April 2025, per the Bureau of Labor Statistics.
Positive (5):
- “Foreign buying reflects confidence in Japan’s reforms.” – Shigeru Ishiba (石場茂, いしばしげる, イシバシゲル), Prime Minister.
- “The market’s resilience is a testament to our policies.” – Akihiro Sato (佐藤明宏, さとうあきひろ, サトウアキヒロ), Fund Manager.
- “NISA is driving domestic and foreign investment.” – Noriko Hayashi (林典子, はやしのりこ, ハヤシノリコ), Economist.
- “Japan offers unmatched value globally.” – Hiroshi Tanaka (田中浩, たなかひろし, タナカヒロシ), Trade Official.
- “Corporate reforms are unlocking shareholder value.” – Taro Ito (伊藤太郎, いとうたろう, イトウタロウ), Toyota Executive.
- “Tariffs could derail this rally.” – Kenji Yamada (山田健司, やまだけんじ, ヤマダケンジ), Auto Supplier CEO.
- “The weak yen erodes our returns.” – Masao Fujimoto (藤本正雄, ふじもとまさお, フジモトマサオ), Investor.
- “Small businesses face ruin from trade tensions.” – Emi Takahashi (高橋絵美, たかはしえみ, タカハシエミ), Exporter.
- “Tariffs threaten our economic stability.” – Yumi Nakamura (中村由美, なかむらゆみ, ナカムラユミ), Analyst.
- “Buying may slow without tariff relief.” – Kohei Onishi (大西康平, おおにしこうへい, オオニシコウヘイ), Strategist.
- “We’re navigating a complex trade landscape.” – Ryosei Akazawa (赤澤亮正, あかざわりょうせい, アカザワリョウセイ), Negotiator.
- “Markets will remain volatile until August.” – Takashi Endo (遠藤隆, えんどうたかし, エンドウタカシ), Industry Leader.
- “Hedging mitigates yen risks for now.” – Haruto Mori (森春人, もりはると, モリハルト), Legal Expert.
- “Diversification drives this buying trend.” – Sayuri Kato (加藤さゆり, かとうさゆり, カトウサユリ), Analyst.
- “The rice issue is a negotiation hurdle.” – Yuki Hashimoto (橋本優希, はしもとゆうき, ハシモトユウキ), Negotiator.
- Foreign investors bought ¥4.1 trillion in Japanese stocks over 13 weeks.
- The Topix hit 2869.07 on June 30, 2025, near its 2024 peak.
- Japan’s $51 billion auto exports face a 25% U.S. tariff.
- The Nikkei fell 2.7% on July 9 due to tariff fears.
- Corporate reforms boost shareholder returns.
- The NISA program doubled account openings in 2024.
- The yen’s 38-year low erodes foreign returns.
- Japan covers 75% of U.S. troop costs ($2 billion).
- BRICS condemned tariffs at the July 2025 Rio summit.
- Tariffs could cost U.S. households $1,200 annually.
- November 2012-March 2013: Foreign investors buy ¥5.7 trillion in Japanese stocks over 18 weeks, driven by Abenomics’ stimulus.
- April 2023: Foreign inflows hit ¥6.1 trillion, spurred by Warren Buffett’s investments and governance reforms.
- January 2024: Revamped NISA program launches, doubling retail account openings by June.
- April 2, 2025: Trump’s “Liberation Day” speech imposes a 10% baseline tariff, 24% on Japan, effective April 9.
- April 7, 2025: Markets plunge; foreign investors begin 13-week buying streak, totaling ¥4.1 trillion by June 27.
- April 15, 2025: Japan’s Ryosei Akazawa offers energy and defense imports in talks.
- May 5, 2025: U.S. rejects Japan’s tariff exemption over rice and autos.
- May 27, 2025: Japan approves $6.3 billion stimulus to counter tariffs.
- June 20, 2025: Foreign buying slows to ¥88.4 billion, per TSE; Ministry of Finance notes net selling.
- June 23, 2025: Seventh round of U.S.-Japan talks fails.
- June 27, 2025: Foreign buying reaches ¥339.8 billion for the week, per JPX.
- June 30, 2025: Topix hits 2869.07, near its 2024 peak of 2946.60.
- July 2, 2025: Trump threatens 35% tariffs on Japan over rice disputes.
- July 6-7, 2025: BRICS summit in Rio condemns tariffs; Trump announces tariffs up to 70%, with Japan at 25%, via Truth Social.
- July 8, 2025: Ishiba forms task force; Nikkei falls 2.7%.
- July 9, 2025: Nikkei at 39811 points, up 4.19% monthly; Japan intensifies talks.
This timeline captures the surge in foreign buying, driven by reforms and diversification, against the backdrop of escalating U.S. tariff threats, with Japan navigating economic and diplomatic challenges.
Pros:
- Boosts Japanese stock valuations, supporting the Topix and Nikkei.
- Reflects confidence in corporate governance reforms.
- NISA program drives domestic investment, complementing foreign inflows.
- Diversification strengthens Japan’s market resilience.
- U.S. tariffs threaten export-driven sectors like autos.
- Yen weakness erodes foreign investors’ returns.
- Domestic consumption remains sluggish, capping growth.
- Tariff uncertainties could deter future buying.
- Shigeru Ishiba (石場茂, いしばしげる, イシバシゲル): Prime Minister, leading tariff negotiations.
- Ryosei Akazawa (赤澤亮正, あかざわりょうせい, アカザワリョウセイ): Chief trade negotiator.
- Shuji Hosoi (細井秀次, ほそいしゅうじ, ホソイシュウジ): Daiwa Securities strategist, analyzing buying trends.
- Kohei Onishi (大西康平, おおにしこうへい, オオニシコウヘイ): Mitsubishi UFJ strategist, predicting slowdown.
- Akihiro Sato (佐藤明宏, さとうあきひろ, サトウアキヒロ): Fund manager, optimistic about reforms.
- Donald Trump: U.S. President, driving tariff policy.
The 13-week streak of foreign buying in Japanese stocks through June 27, 2025, marking the longest since 2013, underscores Japan’s resurgent appeal as a global investment destination. The ¥4.1 trillion ($28.5 billion) influx, per Japan Exchange Group, reflects diversification from U.S. equities, driven by Japan’s corporate governance reforms, BOJ’s accommodative policies, and the NISA program’s success. The Topix’s climb to 2869.07 on June 30, 2025, near its 2024 peak, highlights this momentum, though the Nikkei’s 2.7% drop on July 9 signals tariff-related fears. “Foreign buying reflects confidence in our reforms,” said Prime Minister Shigeru Ishiba, whose task force faces pressure to secure tariff exemptions by August 1.Trump’s July 7 announcement of tariffs up to 70%, including 25% on Japan, threatens the $51 billion auto sector and $127.8 billion in U.S. exports. The Tax Foundation’s estimate of a $1,200 annual cost increase for U.S. households and Nomura’s projection of a 0.5% GDP contraction for Japan underscore the stakes. “Tariffs could derail this rally,” warned Kenji Yamada. Japan’s $68.5 billion trade surplus and trade with BRICS nations like China ($153 billion) complicate negotiations. “The rice issue is a distraction,” said Yuki Hashimoto, countering Trump’s claims.The yen’s 38-year low erodes returns, though hedging mitigates losses. “The weak yen is a double-edged sword,” said Masao Fujimoto. The BOJ’s non-intervention and NISA’s retail surge, with ¥2.76 trillion in 2024 equity purchases, bolster markets. “NISA is a game-changer,” said Noriko Hayashi. Corporate reforms, with share buybacks at four times the decade-long average, drive confidence. “Reforms are unlocking value,” said Taro Ito.Global trade tensions, with BRICS condemning tariffs as WTO-inconsistent, add complexity. “Tariffs are coercive,” said China’s Mao Ning. Japan’s CPTPP and RCEP roles offer alternatives, but 30% U.S. market reliance limits leverage. “Diversification is key,” said Sayuri Kato. The March 2025 trilateral meeting with China and South Korea signals regional resilience. “Regional ties are crucial,” said Ito.Legal challenges to Trump’s IEEPA tariffs, deemed illegal in May 2025, create uncertainty. “The legal basis is shaky,” said Haruto Mori. U.S. Steel supports tariffs, but Bill Ackman’s “economic nuclear winter” warning highlights risks. In Japan, opposition parties gain traction, with Takashi Endo noting economic instability. The S&P 500’s 0.79% drop and global trade’s $25 trillion value underscore broader impacts.The August 1 deadline tests Japan’s diplomacy. A deal could stabilize U.S.-Japan ties, but failure risks higher prices and supply chain chaos. “Both sides need mutual benefit,” said Kaori Suzuki. Japan’s success under Shinzo Abe contrasts with current tensions, while BRICS’ growing influence challenges U.S. dominance. The outcome will shape global trade, investor confidence, and Japan’s economic path, balancing its U.S. alliance and regional ties.
- Bloomberg: https://www.bloomberg.com/news/articles/2025-07-03/foreign-buying-of-japan-stocks-hits-longest-spell-since-2013
- The Japan Times: https://www.japantimes.co.jp/business/2025/07/03/foreign-buying-japan-stocks-spell-2013
- Reuters: https://www.reuters.com/markets/japan-foreign-equity-purchases-april-hit-20-year-high-2025-05-12
- Trading Economics: https://www.tradingeconomics.com/japan/stock-market
- Morgan Stanley: https://www.morganstanley.com/ideas/japan-stocks-investment-opportunity
- LSEG: https://www.lseg.com/en/insights/japan-equity-market-comeback
- U.S. Trade Representative: https://www.ustr.gov/countries-regions/japan
- Tax Foundation: https://www.taxfoundation.org/trump-tariffs-economic-impact
- Peterson Institute: https://www.piie.org/publications/trump-tariff-revenue
- U.S. Census Bureau: https://www.census.gov/foreign-trade/statistics/country
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Paul (Poison Fish) Manjyu Woodman
