Foreign investors remained net buyers of Japanese stocks in 2001, but their buying excess visibly tapered off in the second half of the year.

Nonresidents chalked up 2.32 trillion yen in net purchases last year, compared with net sales of 2.36 trillion yen in 2000, according to industry figures.

Having bought 2.7 trillion yen more than they sold in the first half of 2001, however, they were busy adjusting their overbought positions later in the year. Foreign players sold as much as 481 billion yen more than they bought in the second week of December alone, more than offsetting their net purchases over the previous six weeks.

Brokerage officials cited a global stock market setback in recent months and a lack of progress in Japan's structural reforms as major factors behind the shift in investor sentiment for the worse.

In December, nonresidents chalked up 378.8 billion yen in net sales, against net buys of 285.9 billion yen in November.

Among domestic players, city, regional and long-term trust banks chalked up 1.51 trillion yen in net sales last year in a direct turnaround from net purchases of 1.51 yen in 2000.

Overburdened by nonperforming loans, they continued unloading their equity holdings last year.

As the nation's industrial web of cross-shareholdings continued to unravel, Tokyo share prices remained in a deep slide through much of the second half of the year, frightening individual and other major players away from the market.

By contrast, trust banks stepped up purchases, buying 738 billion yen more than they sold in the last two months of 2001 on top of 622 billion yen in the first half of the year.

There was talk that the nation's private and public pension funds moved into the market in search of potential gains as many stocks fell.