It is expected that the Japanese stock market will see seasonal fund outflows in September for the 11th consecutive year.

As of the week ending September 20, foreign investors have been selling Japanese stocks for the second consecutive week. Prior to this, the Japanese stock market experienced a record-breaking rally, and this round of selling is to lock in profits, which also makes it likely that the Japanese stock market will see net outflows of funds in September for the 11th consecutive year. Data released by the Japanese Ministry of Finance last Friday showed that after foreign investors sold a net of about 2.03 trillion yen of Japanese stocks the previous week, they again sold a net of 1.75 trillion yen of Japanese stocks this week. Since 2015, foreign investors have been reducing their holdings of Japanese stocks every September, with the largest reduction in 2023 reaching 5.48 trillion yen. As of now, foreign investors have reduced their holdings by approximately 3.67 trillion yen. Foreign investors typically reduce their holdings of Japanese stocks in September for reasons including end-of-quarter asset rebalancing, seasonal risk aversion, and taking profits selectively after a period of stock market gains.