A man passes through an electronic board showing the 225 Nikkei Index in the Tokyo Stock Exchange along a street in Tokyo on April 7, 2025.
Kazuhiro nogi | AFP | Getty images
Japan saw foreign records in their long -term actions and bonds in April when investors fled from the US markets after the commercial save of President Donald Trump against friends and enemies equally.
Investors abroad bought 8.21 billion yen ($ 56.6 billion) in long -term shares and bonds in April, according to government data. Net tickets were the largest for a calendar month since Japan’s Ministry of Finance began collecting data in 1996, according to Morningstar.
“Trump’s tariff shocks probably changed the perspective of global investors on the economy of the United States and the performance of assets, which probably led to diversification far from the United States to other important markets, including Japan,” said Yujiro Goto, Chief of FX Nomura Strategy in Japan.
Now, with the United States softening its commercial position and surprising agreements, even with China, confidence in the assets of the United States is being restored. So what is that for Japanese assets?
It was a fairly exceptional month, when he considers everything that has happened in the global macro economic environment.
Kei Okamura
Neuberger Berman
The majority of 8.21 billion yen of net tickets also occurred in the first week just after April 2, according to the Ministry’s data.
After the announcement of Trump’s “reciprocal” rates, the 10 -year treasure performance in the United States increased the 30 basic points (April 3 to 9), while Japan’s 10 -year yield fell into 21 basic points (from April 2 to 8).
While worldwide actions saw a sale of immediate rates from Trump’s rates, throughout the month, Japan Nikkei 225 increased more than 1%, compared to the S&P 500that fell a little less than 1%.
Japanese assets are generally considered a shelter, whose appeal increased as the “American sale” narrative won ground in April, said Rashmi Garg, senior portfolio manager of Al Dhabi Capital.
The entry was largely promoted by institutional investors instead of retail investors, said Nomura’s Goto. The pension funds and other asset administrators probably bought actions aggressively, while the purchases of Japanese bonds were largely driven by reserve managers, life insurance and pension funds, according to Nomura.
“It was a fairly exceptional month, when it considers everything that has happened in the global macro economic environment,” said Kei Okamura, the MD of Neuberger Berman and the manager of portfolio of Japanese shares.
“That obviously had an impact on the way global investors were thinking about the assignment of assets to the United States … they needed to diversify,” he told CNBC in a phone call.
The way ahead
Al Dhabi Capital Garg expects tickets to decrease the progress in tariff conversations between the United States and China, and also as agreements with other countries are likely. In fact, Great Britain became the first country in INK an agreement with the United States last week.
While historical monthly tickets may not continue, market observers still have a positive perspective of Japanese assets and continue to see strong tickets.
The actions and flip flops of unprecedented policies have deed the credibility and confidence of the United States in their assets, and this could still lead to global fund managers investing less in the US markets in favor of others, explained Vasu Menon, OCBC managing director of the investment strategy team.
“Given this backdrop, the demand for Japanese assets can remain healthy even if it is not as strong as the level of April,” he said. Japan’s ongoing conversations with the United States with respect to tariffs have also raised some optimism about reducing “reciprocal” rates of 24% in Japan, Menon said.
Japanese actions will also benefit from the corporate governance reforms of the Tokyo Stock Exchange, which has prioritized the returns of the shareholders, wrote Asset Management One International in note.
TSE Corporate Governance Reforms, which began in March 2023, guaranteed companies whose shares operate below a price / book relationship to “comply or explain.” The initiative aims to promote the appeal of Japan Inc. to foreign and national investors.
This reform program has led to probable record levels of shares of shares in Japan, which improves both the profits per share and the price of the shares, said Asset Management One International.
While the dollar has recovered some force after the sale of the sale of April, the potential to weaken even more and the Japanese currency to strengthen “makes sense” that investors analyze Japanese shares, especially when the economy bounces, said Okamura by Neuberger Berman.
“So this trend has legs. Japan will probably continue to see good flows,” Okamura said.
Morningstar’s capital research analyst Michael Makdad, sees more net entries in Japanese actions than in the last decade in the middle of the best corporate governance.
That said, he does not see the same weight of net tickets in the invoices of the Japanese Treasury in the short term, since when the Bank of Japan was implementing negative interest rates, since the arbitration opportunity for some foreign investors who existed is no longer present now.
