Foreign investment in Japanese stocks rose from ¥752.6 billion to ¥1,344.2 billion as of October 24. This increase shows that more people are interested in Japan’s financial markets. During the month, more capital flowed into Japan, which caught the attention of global investors. The big jump in investments indicates that Japan’s stocks are currently appealing.

Economic Activity Trends

These numbers point to a time of increased economic activity. This trend may affect both local and international markets in the coming months. We see a strong bullish signal with foreign investments in Japanese stocks nearly doubling to ¥1,344.2 billion in the report for the week of October 24. This large inflow of cash suggests that international investors find value and growth potential in the Japanese market. Such a sharp rise often signals positive price movement in the upcoming weeks. The influx of foreign money coincides with the Nikkei 225 breaking through the 42,000 resistance level, a level it has maintained for several days. The yen’s weakness, currently around 165 to the U.S. dollar, makes Japanese stocks cheaper for foreign buyers. This currency benefit gives the market strong support that we expect to last.

Investment Strategies

In this scenario, traders might want to buy call options on the Nikkei 225 index or related ETFs with expirations in December 2025 and January 2026. The strong inflow provides a solid base for a continued rise, and call options can help maximize profits. We should target strike prices just above the current market price to enhance potential gains. Another option is to sell out-of-the-money put spreads on major Japanese exporters that benefit most from the weak yen. Companies in the automotive and electronics sectors have reported solid earnings, and recent data shows Japan’s exports rose 5.4% year-over-year in September. This strategy allows us to earn premium while managing our risk, as a significant downturn seems unlikely in the near future. In the past, we saw a similar wave of foreign investment in 2013, which started a multi-year bull market driven by supportive central bank policies. That time also saw the yen weaken greatly, creating a profitable landscape for equity investors. Current data suggests we might be at the beginning of a similar cycle. Create your live VT Markets account and start trading now.

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