Japanese investors sell foreign stocks in April as energy costs rise

• Japanese trust accounts led the pullback with 1.85 trillion yen withdrawn from foreign stocks, the largest monthly outflow since June 2025
• U.S. consumer prices rose at the fastest pace in three years in April, contributing to caution on overseas investments
• First quarter data showed Japanese investors sold 4.95 trillion yen in U.S. bonds and 1.02 trillion yen in European bonds

Summary: Japanese Investors Sell Foreign Stocks Amid Energy Cost Concerns

Japanese investors became net sellers of foreign stocks in April 2026 for the first time in four months, driven by concerns over rising energy costs from the Iran war and broader inflation risks.

Key Figures

• Net foreign stock sales: 636.4 billion yen ($4.04 billion) in April, the largest monthly selloff since October 2025
• Foreign bond sales: 219.2 billion yen, easing to a three-month low
• Trust account withdrawals: 1.85 trillion yen from foreign stocks, the biggest monthly pullout since June 2025

Investment Flows by Sector

While trust accounts withdrew significantly, some institutional investors took opposite positions:

• Investment trust companies: Net buyers of 1.25 trillion yen in foreign stocks
• Life insurers: Net buyers of 333.1 billion yen in foreign stocks
• Trust accounts: Invested 897.3 billion yen in foreign long-term bonds

Geographic Exposure

Bank of Japan data revealed Q1 2026 selloffs in Western bonds:

• U.S. bonds: 4.95 trillion yen sold
• European bonds: 1.02 trillion yen sold
• French bonds: 797.66 billion yen sold
• German bonds: 307.65 billion yen sold

Market Context

The divestment coincided with U.S. inflation accelerating at its fastest pace in three years in April, with increases across food, services, rental, and airline costs, according to the U.S. Labor Department.

Implications

The shift signals Japanese investor caution toward overseas equities amid geopolitical tensions and inflationary pressures, though selective institutional buying suggests divergent risk assessments within Japan's investment community.