Foreign investors' net purchases of Japanese equities hit a 17-month high last week.
They purchased 426.53 billion yen more than they sold on the Tokyo, Osaka and Nagoya stock exchanges in the holiday-shortened two-day week, up from 189.65 billion yen the previous week, according to a weekly industry report.
The figure was the highest since the 517.03 billion yen set in the second week of December 1999.
While financial institutions and corporate investors continued to unload equity holdings to unwind their cross-shareholdings, nonresident investors remained net buyers for the seventh consecutive week.
With buying interest spreading along a broad front, the benchmark 225-issue Nikkei average climbed past the 14,000 level for the first time since late last year.
Foreign investors reacted positively to the inauguration of the reform-oriented Cabinet of Prime Minister Junichiro Koizumi, brokerage officials said, noting they opted for large-capitalization issues, including high-technology and auto issues.
For international investors, restructuring programs are always a main consideration, said Koji Fukaya, chief analyst with the Bank of Tokyo-Mitsubishi.
Among domestic players, individual investors remained net sellers for the third straight week, logging 180.4 billion yen in net selling, excluding trading in margin accounts, up from 129.7 billion yen the previous week.
Long-term credit banks, city banks and regional banks as a whole were net sellers for the sixth week in a row.
Reflecting the strong pickup in foreign purchases, the Nikkei average soared 491.14 points, or 3.5 percent, to end at 14,425.46 on Tuesday, the highest since Dec. 18.