Foreign money pours into tech stocks to fuel Tokyo rally

Jun 02, 2017 | News On Japan

Jun 02, 2017 (Nikkei) - The inflow of international funds into information technology and semiconductors powered the Nikkei Stock Average's recovery Friday to above 20,000. But the automotive and financial sectors are faltering, highlighting the gap between Japanese equities and their foreign peers.

International investors sold over 1 trillion yen ($9.05 billion) more in Japanese equities than they bought in the first three months of the year. They were then net purchasers for eight straight weeks through May 26 to the tune of 1.52 trillion yen.

The foreign money streaming in Friday was so overwhelming that "no matter how much was sold, prices wouldn't go down," a trading specialist at a major Japanese brokerage said.

IT and semiconductor stocks have been among the strongest year-to-date performers. Chipmaking equipment maker Tokyo Electron's share price has soared 48%, exploring territory not seen in 17 years. Smartphone game provider Mixi has rocketed 64%, while online retailer Start Today has surged 41%.

Among domestically focused components of the Nikkei average, food companies stand out. Frozen-food maker Nichirei has jumped 30%, and beverage group Kirin Holdings more than 20%. Price hikes across the market are improving margins in the sector, according to Pictet Asset Management (Japan).

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