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Foreign investors were net buyers of Japanese stocks for the eighth straight week last week.

Nonresidents bought 300.84 billion yen more than they sold, compared with 426.53 billion yen the previous week, which was their highest net purchases since 517.03 billion yen in the second week of December 1999, according to a weekly industry report.

While domestic financial institutions and corporate investors were busy unwinding their cross-shareholdings, foreign investors have bought a net 3 trillion yen so far this year, more than offsetting their net sales for all of 2000 — 2.36 trillion yen.

In April alone, they bought a net 1.09 trillion yen, the highest level since June 1999.

As a major factor behind their strong buying interest, brokerage officials cited the inauguration of the reformist Cabinet of Prime Minister Junichiro Koizumi.

Foreign investors are counting on economic restructuring advocated by Koizumi, they said.

Koizumi is expected to press forward with sweeping restructuring programs to get the moribund economy back on track and clear the banking sector’s bad loan mess.

There is speculation that new investment funds set up in Europe have focused on Japanese blue-chip issues.

There were indications that foreign investors also opted for steel and other low- and medium-priced issues, cyclical issues that had long been neglected.

Gloom has deepened over European economic prospects in recent months, prompting Europe-based institutional investors to increase their weight on Japanese stocks.

Major domestic players, on the other hand, remained on the sidelines.

Long-term credit banks, city banks and regional banks as a whole were net sellers for the seventh week in a row, logging 67 billion yen in net selling, up from 41.29 billion yen the previous week.

In contrast, individual investors turned net buyers for the first time in four weeks.

Apparently enticed by high-priced activity in recent weeks, individual investors stepped up purchases on credit, bringing their net purchases to 57.86 billion yen, including cash trading, against net sales of 199.41 billion yen the previous week.

The strong foreign buying interest provided a floor for falling Tokyo share prices.

The 225-issue Nikkei average soared to 14,529.41 on May 7, a level unseen since late December.

With much of the uptrend running out of steam later in the week, however, the Nikkei average ended the week at 14,043.92, down 377.72 points, or 2.6 percent, on the week.

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