Japanese Retail Investors Flee Domestic Equities for US Markets Despite Local Rally
Japanese retail investors sold a net ¥3.8 trillion ($24.3 billion) in domestic equities through November 2025, marking the heaviest outflow in a decade. The selling persisted even as the Topix index surged 25%, outperforming the S&P 500 in yen terms by the widest margin since 2015.
Meanwhile, purchases of foreign stocks through investment trusts neared ¥9.4 trillion, approaching 2024's record levels. The sustained demand reflects unwavering confidence in US markets during Donald Trump's second presidency, amplified by yen weakness boosting dollar-denominated returns.
Prime Minister Sanae Takaichi's pro-growth policies and corporate earnings strength failed to retain capital at home. Bank of America's Adarsh Sinha notes the 'unprecedented' nature of these flows, which simultaneously pressured the yen and rewarded US-focused portfolios.
