Final Tokyo Stock Exchange Buy-Sell Data Released for Y2005 -- You Might Be Surprised (EWJ, ITF, VPL, JEQ, JOF)

|
Includes: EWJ, JEQ, JOF, JPXN, VPL
by: Steven Towns

The Tokyo Stock Exchange released the final data for buy and sell transactions for Y2005. Foreign investors set a record by buying a net total of 10.3 trillion yen of Japanese stocks. This is the first time in history the yen value of net purchases has exceeded 10 trillion yen. Using an exchange rate of Y114/US$ that value equals approximately US$90.5 billion. Keep reading for some other interesting pieces of information I was able to pull out of the Japanese financial press concerning the data. Also, don't miss my closing paragraph because it will put the amount of foreign buying in perspective as well as shed some light on the promise the Tokyo Stock Exchange has going forward.

• Net purchasing by foreign investors increased by 34.8% over 2004.

• The prior annual high for net purchases by foreign investors was 1999.
      - Net purchases in 1999 totaled 9.1 trillion yen

• 2005 was the 5th consecutive year of net purchasing by foreign investors.

• Individual investors were net sellers in 2005 to the amount of 3.9 trillion yen.

• 2005 was the 15th consecutive year individual investors were net sellers.

• Net selling by individual investors increased by 8.7% over 2004 and was an all-time high.

• The total amount of buying and selling on the Tokyo Stock Exchange exceeded the total amount at the peak of the bubble in 1989 by almost 100 trillion yen or US$877 billion (at Y114/US$1), setting an all-time record.

If the above has you thinking Japanese stocks are looking potentially a bit bubbly with all the foreign buying against somewhat heavy domestic retail and institutional selling, then be relieved by the fact that in the last week of 2005 individual investors were net buyers and are expected to be so more often than not this year as sentiment improves and the phrase “kabu bu-mu