No Break in Yen Depreciation... Domestic Investors Flock to Japanese Stocks

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] As the Japanese stock market shows a stable trend amid an unprecedented weak yen phenomenon, domestic investors' interest is increasing.

According to the Korea Securities Depository on the 11th, from the 1st to the 31st of last month, the net purchase amount of Japanese stocks by domestic investors was $9,463,801 (approximately 13.0837 billion KRW), a 33% increase compared to $7,112,906 in July. The net purchase amount of Japanese stocks recorded a negative value in May and June but has been increasing again since July.

The trading volume in August, combining both buy and sell transactions, was 9,740 cases, which not only increased compared to last month (7,611 cases) and the same month last year (6,531 cases) but also marked the highest volume since records began in 2011.

As the yen-dollar exchange rate rose to the 140 yen level for the first time since August 1998, the index showed an upward trend. The Japanese Nikkei 225 index rose by 1.04% throughout August, contrasting with the significant declines in major global indices.

Although the weak yen phenomenon continues due to the strong dollar, experts believe that the potential for further rises in the Japanese stock market is limited. Tae-dong Oh, a researcher at NH Investment & Securities, said, “The economic recovery is stalling due to the resurgence of COVID-19,” adding, “Despite the Bank of Japan's accommodative monetary policy, like other advanced countries, the potential for stock price increases is limited.”

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