For the first time in four months, Japanese investors pulled money out of foreign stock markets during April, withdrawing funds as worries about rising energy prices from Middle East conflicts and broader inflation risks made them more cautious about overseas investments.
According to data released Wednesday by Japan’s Ministry of Finance, investors withdrew a net 636.4 billion yen ($4.04 billion) from foreign stocks last month. This marked the biggest monthly withdrawal since October of last year.
While Japanese investors continued selling foreign bonds, that selloff slowed to its lowest level in three months at 219.2 billion yen during April.
The moves came as U.S. inflation data showed consumer prices climbing at their fastest rate in three years during April, with increases spanning food, services, housing costs and airline tickets, according to Tuesday’s report from the U.S. Labor Department.
Japanese trust accounts led the foreign stock exodus, pulling out 1.85 trillion yen in their largest monthly withdrawal since June of last year. However, these same accounts put 897.3 billion yen into foreign long-term bonds.
Not all Japanese investors retreated from foreign markets. Investment trust management firms bought 1.25 trillion yen worth of foreign stocks, while life insurance companies purchased 333.1 billion yen worth.
A separate Bank of Japan report revealed that during the first quarter, Japanese investors sold 4.95 trillion yen in U.S. bonds and 1.02 trillion yen in European bonds.
The European bond sales included 797.66 billion yen worth of French bonds and 307.65 billion yen in German bonds.
