TechFlow News, June 4: According to data from the Japan Exchange Group, foreign investors net sold approximately ¥395 billion (about $2.5 billion) worth of Japanese equities during the week ended May 29, ending an eight-week streak of net buying. This sell-off occurred as the technology-heavy Nikkei 225 Index—driven primarily by AI-related stocks such as SoftBank, Kioxia, and Murata Manufacturing—surpassed the 65,000-point threshold for the first time. The Nikkei’s rapid surge has triggered concerns among some market participants about overheating, prompting profit-taking.
Pelham Smithers, Managing Director of UK-based equity research firm Pelham Smithers Associates, stated: “An increasing number of people believe AI is forming a bubble, and we estimate that AI-related stocks account for roughly 70% of the Japanese equity market’s gains in 2026.” He added that, amid rising caution, some global investors “wish to exit Japan and redeploy capital into markets with less pronounced AI exposure, such as Europe.” (Jinshi)
