Japanese stocks gain foreign inflows for second week on chip sector rally

Foreign investors snapped up Japanese stocks for a second straight week through July 5, bolstered by a rally in AI-linked technology stocks, even as the broader market retreated on caution ahead of the deadline for U.S. trade deals.

They bought a net 611.7 billion yen worth of domestic shares during the week, logging their 13th weekly net purchase in 14 weeks, data from Japan's finance ministry showed on Thursday.

The Nikkei NI225 hit an 11-1/2-month high of 40,852.54 last week but slipped to close with a weekly loss of 0.85%.

Technology stocks, however, rallied amid a surge in global demand for artificial intelligence technologies. AI investor SoftBank Group 9984 added 6.15%, while chip-testing equipment maker Advantest 6857 closed at its weekly record levels.

U.S. President Donald Trump on Monday announced 25% duties on goods from Japan from a new deadline of August 1.

Japanese long-term bonds, meanwhile, saw a net 164.6 billion yen foreign outflow, partly reversing a net 1.06 trillion yen weekly net purchase the prior week. Short-term bills gained a net 447.3 billion yen in foreign inflows during the week.

In overseas debt markets, Japanese investors racked up a net 1.66 trillion yen worth of long-term foreign bonds in their biggest weekly net purchase in seven weeks. They also bought a net 73.6 billion yen worth of short-term bills.

Japanese investors, however, divested foreign stocks worth a net 512.7 billion yen, the largest weekly net figure in four weeks.