Japanese stocks see second straight week of foreign inflows

Aug 18 (Reuters) – Foreigners were net buyers of Japanese stocks for a second straight week in the week ended August 12 as risk-on buying kicked in after a cooling US inflation raised hopes that the Federal Reserve might slow the pace of interest rate increases.

Overseas investors bought Japanese stocks worth a net JPY 393.85 billion (USD 2.91 billion) last week, marking their biggest weekly purchase since July 22, data from exchanges showed.

They purchased JPY 122.9 billion in cash equities and acquired JPY 270.95 billion worth of derivatives, in a fourth straight week of net buying.

Last week, fears about red-hot US inflation eased as data showed that consumer prices were unchanged in July compared with June, which raised hopes that inflation would have already peaked.

Japanese top equities’ benchmarks — the Nikkei share average and the Topix index — both gained about 1.3% last week, posting a second straight weekly rise.

The Nikkei index hit a more than seven-month high of 29,222.77 earlier this week, as a rally on Wall Street and a fresh set of robust corporate earnings domestically boosted sentiments.

Meanwhile, Japanese bonds lost a net JPY 289.4 billion in cross-border outflows in the week, that marked the first weekly net selling in seven weeks, by outsiders.

Non-Japanese bonds drew a net JPY 1.09 trillion worth of funds from Japan, although equities saw disposals, worth JPY 234.8 billion, in a second subsequent week of net selling.

(USD 1 = JPY 135.2100)

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; editing by Uttaresh.V)