Foreign investors turned net sellers of Japanese stocks last week.
Nonresident investors sold 37.93 billion yen more than they bought in the week from Feb. 18 to 22, marking a turnaround from net purchases of 89.75 billion yen the previous week, itself the first buying excess in five weeks.
Brokerage officials cited tightened restrictions on short selling as a major factor behind their buying excess the previous week.
Under the tightened rules, market players are prohibited from offering to sell borrowed shares at prices below their current market prices.
The Financial Services Agency has also called on the Securities and Exchange Surveillance Commission to stave off violations of regulations governing short sales, prompting institutional investors -- including hedge funds -- to buy back shares and cover their short positions.
Among domestic players, trust banks remained net buyers for a third week, reflecting an increased flow of money from pension funds.
Trust banks chalked up 103.7 billion yen in net purchases, compared with 64.11 billion yen the previous week.
With the downtrend in share prices having continued unabated for months, a broad array of stocks dropped to attractive price levels, enticing pension fund managers to allocate more money to trust banks, brokerage officials said.
Individual investors turned net buyers, logging 6.91 billion yen in net purchases, against net sales of 72.76 billion yen the previous week.
City banks, long-term credit banks and regional banks remained net sellers for the 21st straight week, while life insurers and casualty insurance firms were net sellers for the eighth consecutive week.