Japanese Average Cash Earnings YoY Actual 2.3% (Forecast 2.6%, Previous 2.1%)

Japanese Average Cash Earnings YoY Actual 2.3% (Forecast 2.6%, Previous 2.1%)

Japanese investors continued their streak of buying foreign stocks, marking the eighth consecutive week of net purchases. According to data from Japan's Ministry of Finance, Japanese investors bought a net 250.8 billion yen ($1.72 billion) worth of foreign stocks during the week ended May 10 [1]. This figure, while significantly lower than the previous week's 2.55 trillion yen, reflects a broader trend of increased optimism among Japanese investors.

The surge in foreign stock purchases is attributed to progress in U.S. trade negotiations and easing concerns over the global economic impact of a trade war. The MSCI World Index EURONEXT:IACWI has surged by about 20.88% since hitting nearly a 15-month low on April 7 [1]. The index is now just 1.6% below its record high, indicating a robust recovery in global markets.

Japanese investors have now acquired a net 8.2 trillion yen in foreign equities so far this year, the largest total for the same period since at least 2005 [1]. This growth is also supported by a net inflow of 1.92 trillion yen into long-term overseas bonds, reversing the prior week's net sales of 514.2 billion yen [1].

Moreover, Japan’s equity markets have attracted around 439 billion yen in foreign capital, with cross-border investors extending net purchases to a sixth straight week [1]. Meanwhile, foreign investors net sold 141.1 billion yen in long-term Japanese government bonds but picked up 973.9 billion yen in short-term Japanese bills [1].

Despite the positive trends, there are some concerns about the Japan business of Domino's Pizza Enterprises (DMP). Jefferies has maintained a "buy" rating and a price target (PT) of A$42, but Citi has lowered its FY26 like-for-like Japan sales forecast to +0.4% from +2% and estimates NPAT to fall by 2%, 5%, and 4% for fiscal years 2025, 2026, and 2027, respectively [2]. Citi has also reduced its PT by 25% to A$23.82, retaining a "neutral" tag.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3RN0A2:0-japanese-investors-extend-foreign-stock-buying-to-eighth-week-on-trade-optimism/
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L6N3S60T0:0-brokerages-cautious-on-australia-s-domino-s-pizza-following-japan-ceo-change/