Foreign Investment in Japanese Stocks Expected to Surge After Election

Following a decisive election victory by Japan's Liberal Democratic Party, foreign investment in Japanese stocks is anticipated to accelerate significantly. According to Jin10, analysts predict that foreign buying could increase up to fivefold in the coming months, potentially surpassing levels seen during the Abe era. With Prime Minister Sanae Takaichi's historic win and a clear mandate to pursue bold spending plans, global investors are reassessing the Japanese market, focusing on improved growth momentum, corporate reforms, and factors favorable to corporate profits such as reflation. Nomura Securities' Chief Equity Strategist Tomochika Kitaoka suggests that if the market expects the Takaichi administration to implement growth strategies under moderate fiscal expansion, net foreign purchases could reach as much as 10 trillion yen (approximately $64.1 billion) within the next three months.