Japanese stocks see biggest weekly foreign outflow in eight weeks

Foreign investors ramped up selling in Japanese shares last week, as a newly identified Omicron coronavirus variant fanned worries of fresh restrictions and its impact on global economic recovery.

Foreigners sold stocks worth a net 653.87 billion yen in the week to Nov. 26, their largest weekly net selling since Oct. 1, data from Japanese exchanges showed.

Investors sold a net 405.56 billion yen worth of derivatives and a net 248.31 billion yen in cash equity markets.

However, overseas investors purchased Japanese bonds worth 2.31 trillion yen last week, that marked a fourth consecutive week of net buying, finance ministry data showed.

The Nikkei share average dropped 3.34% last week, marking the biggest decline in eight weeks, while the Topix index lost 2.9% on worries about Omicron, a possibly vaccine-resistant coronavirus variant that is rapidly spreading in South Africa.

Both Japanese indexes are set for a second straight week of declines on rising uncertainties about global economic recovery, after more countries reported cases of the Omicron variant. A hawkish tilt at the U.S. Federal Reserve fuelled risk-off sentiments further.

Japanese investors sold a net 1.56 trillion yen in overseas bonds last week, although they purchased cross-border equities worth a net 105.7 billion yen, after four straight weeks of net selling.