J.P. Morgan Japan FTM 9 Jun 26 Uptrend in Japan equities supported by capital flows; Upgrade Kikkoman to OW; Recruit Holdings update; Rakuten Bank update; Panasonic Investor Day; New games announced and More

Research evidence excerpt

J.P. Morgan Japan FTM 9 Jun 26 Uptrend in Japan equities supported by capital flows; Upgrade Kikkoman to OW; Recruit Holdings update; Rakuten Bank update; Panasonic Investor Day; New games announced and More

Asia Pacific Equity Research

Japan First to Market 09 June 2026

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Japan Equity Strategy (Rie Nishihara)

Long-term uptrend in Japanese equities supported by capital flows: Individual investors and

financial institutions awaken to Japanese equity investment

Looking at capital flows in the Japanese market, we see that overseas investors, the largest holders of Japanese equities, have

remained strong net buyers in 2026 year-to-date, comparable to 2023 and the Abenomics era (2012–2015). In global equity

markets, we have observed a need to diversify some funds out of the US due to concerns about market volatility risk from the

AI-driven rally. As the Asian tech market could resonate with the US market based on AI growth, the Japanese market, with its

diverse structural investment themes, is still viewed among investors as a candidate for diversification. The more significant

development is among individual investors, who hold over ¥2,300 trillion in assets. Individual investors have increased their

ratio of Japanese equities in NISA accounts to over 50%, and the weighting of Japanese equities in personal assets is

approaching 20% (as of end-March 2026). Individual investors are set to surpass corporates and become the third largest

holders of Japanese equities, after overseas and domestic investors. Among financial institutions, deposit-taking institutions

(e.g., banks) appear to have started repatriating funds by reducing foreign securities and increasing investments in domestic

bonds in February-March 2026.