Who caused the Nikkei average plunge and surge after the corona shock? Supply and Demand Analysis of Japanese Stocks

This article is “Top 3 minutes” of “Tousil” provided by Rakuten Securities. It is a reprint from today’s investment strategy.

Today’s Point

Foreigners consistently sell over
In the crash phase, individuals and the Bank of Japan bought it, but the rebound was almost a one-handed buy of the Bank of Japan.
Who is buying Japanese stocks in the rebound phase?
Investment Decisions of Japanese Stocks

We would like to introduce the views of Masayuki Kubota, Director and Chief Strategist of Rakuten Securities Economic Research Institute.

Foreigners consistently sell over

The Nikkei stock average fell to 6,834 yen in just four weeks from February 25 to March 19. However, it rose to 4,043 yen over more than eight weeks until May 20. I regained about a percent of the reduction width.

Nikkei Average Daily: January 4 – May 20, 2020

Who is directing this sudden and soaring? In the past 30 years, foreign investors have always been able to make Japanese stocks plummet and soar. However, the aspect is a little different this time.

The crash until March 19 was caused by foreign sales, but the backlash since then was not due to foreigners. It is mainly due to the bank’s purchase. Foreigners are selling consistently. Please see below.

Foreign Investors’ Buying and Selling Trends in Physical and Nikkei Average Futures for Japanese Stocks – February 25 – May 9, 2020
Source: Rakuten Securities Economic Research Institute from data from the Tokyo Stock Exchange

Foreign investors continued to sell in the face of a sharp decline in the coronashock and the subsequent sharp rebound, and when stocks and Nikkei average futures were combined, they sold out as much as 5,187.2 billion yen.