At the time of the sharp fall in Japanese stocks, foreign capital is frantically fleeing with 1.24 trillion yen. Japanese individual investors are setting a record by purchasing 950 billion yen as they "catch falling knives".

Last week, as Japanese technology stocks faced a sell-off and major stock indexes plummeted, Japanese retail investors boldly bought local stocks against the trend, with trading volume reaching a historic high. Data from the Japan Exchange Group showed that as of the week ending on June 26, Japanese individual investors net bought 950 billion (approximately $59 billion) worth of local equities. In contrast, overseas funds net sold 1.24 trillion, marking the largest net selling since March of this year. Analyst Shota Sando from Tokai Tokyo Intelligence Laboratory Co. said, "This reflects the trading characteristic of retail investors buying on dips against the trend. Last week's market correction, especially the significant weakness in technology stocks, attracted a lot of bottom-fishing capital." He added that a considerable proportion of this was leveraged buying, belonging to short-term funds. "These funds are unlikely to drive the Japanese stock market out of a continuing uptrend, which is also one of the important reasons for the lackluster performance of the stock indexes this week." It is understood that during the week, Japanese AI-related stocks collectively fell as a result of the decline in U.S. technology giants; SoftBank Group (SFTBY.US) also fell due to market concerns about OpenAI postponing its IPO to next year. The technology-heavy Nikkei 225 index fell 2.7% for the week. SoftBank, memory chip maker Kyxion, and fiber optic manufacturer Furukawa Electric all saw their stock prices drop by over 12%. However, despite last week's correction, driven by the global AI trend, the Nikkei 225 index still recorded its best quarterly gain ever. But the rapid rise in this sector has raised concerns about the sustainability of valuations, making it more vulnerable to severe volatility and deep pullbacks. Sando believes, "Given the significant net selling by foreign funds in the cash market, the trend of funds rotating into technology stocks may have come to an end. Foreign funds pausing their purchases will limit the rise in Japanese stocks - and short-term funds tend to switch to selling when the uptrend stagnates, coupled with retail investors' leveraged positions, the current supply and demand situation is not optimistic."