Foreign investors extend Japan stock buying streak on AI boom

Foreign investors kept buying Japanese stocks for an eighth straight week through May 23, adding a net 1.08 trillion yen, or about $6.77 billion, to local equities as the global AI trade broadened beyond U.S. megacaps. The pace quickened from the prior week’s 948.4 billion yen and lifted year-to-date foreign purchases to nearly 11.7 trillion yen, far above the roughly 742.1 billion yen seen in the same period last year.

The latest wave of money was concentrated in names linked to chips and artificial intelligence. SoftBank Group jumped 17.62% last week, while chip designer Socionext rose 12.26%, underscoring how investors are using Tokyo as a way to express a view on the AI buildout. Nvidia’s strong demand outlook for its flagship AI chips helped reinforce that trade, feeding buying interest across Asian chipmakers and the wider supply chain that includes semiconductors, advanced manufacturing and AI infrastructure.

For Japan, the attraction is partly valuation and partly leverage to a global technology cycle that still has room to run. The Nikkei has been trading near record highs, with AI enthusiasm doing much of the heavy lifting. That matters because foreign flows can amplify momentum in an export-heavy market, particularly when domestic benchmark names are already acting as proxies for the next phase of computing demand.

The shift also carries implications for domestic investors and pension funds. Persistent foreign buying can support share prices and deepen the market’s concentration in AI-linked winners, making it harder for local capital to sit out the rally. Japanese asset allocators face a familiar choice: follow the foreign money into the same semiconductor, software and industrial suppliers tied to AI demand, or risk lagging a market increasingly set by overseas demand.

The story was not limited to equities. Foreign investors also bought a net 1.35 trillion yen of long-term Japanese bonds in the same period, after 1.03 trillion yen of outflows the week before. Together, the equity and bond purchases suggest that global capital is not just chasing a short-lived momentum trade in Tokyo. It is placing a broader bet that Japan has become one of the clearest non-U.S. beneficiaries of the AI investment cycle, with gains spreading from chip designers to the companies that build, power and finance the hardware behind it.