Foreign ownership of Japanese stocks fell for the first time in five years in fiscal 2007 on concern that credit-market losses, rising costs and the strengthening yen will erode profits, the Tokyo Stock Exchange said Wednesday.
Foreign investors owned 27.6 percent of the value of Japan's equities as of March 31, compared with 28 percent a year earlier, the exchange said on its Web site. Net purchases by investors based abroad totaled ¥721.5 billion, about a 10th of the level of the previous year.
The Topix index fell 29 percent in the year to March 31, its biggest decline on record. Japan was the first of the world's 10 biggest stock markets to enter a bear market last November after the U.S. subprime-mortgage collapse deepened in July. A drop of 20 percent marks the beginning of a bear market.
"The drop in net purchases reflected foreign investors' concern corporate earnings would slow because of turmoil in the global financial market, rising commodities prices and a stronger yen," the exchange said in a statement.
Foreign ownership increased the most in the mining industry, which includes Inpex Holdings Inc., Japan's largest oil and gas explorer. The wholesale industry group, which includes commodities traders Mitsubishi Corp. and Mitsui & Co., came in second, followed by oil and coal companies.