Japanese stocks saw foreign outflows amid global AI rout

Feb 6 (Reuters) - Foreign investors pulled out of Japanese stocks in the week through February 1 as domestic AI-linked companies came under pressure following the emergence of a cheaper Chinese AI model, threatening U.S. tech dominance.

As per data from Japan's Ministry of Finance, foreigners sold 315.2 billion yen ($2.07 billion) worth of Japanese shares on a net basis in the week, reversing from net purchases of 752.7 billion yen in the prior week.

AI-focused startup investor SoftBank Group 9984.T dropped nearly 11% in the week, contrasting with a 16.3% gain the previous week. Chip-testing equipment maker Advantest 6857.T and chip-making equipment maker Tokyo Electron 8035.T also shed nearly 14% and 3.5%, respectively.

Overall, the Nikkei benchmark index .N225 shed 0.9% last week. It lost an additional 1.87% this week as U.S. President Donald Trump imposed tariffs on China, although he gave Mexico and Canada a one-month reprieve.

Meanwhile, foreigners snapped up a net 724.5 billion yen worth of long-term Japanese bonds, extending their purchases into a third consecutive week. They, however, ditched 388.5 billion yen worth of short-term bills.

Simultaneously, Japanese investors acquired about 199.2 billion yen worth of foreign shares, which was their eighth weekly net purchase in a row.

Conversely, they divested a net 1.46 trillion yen worth of foreign long-term bonds, halting a three-week buying trend, but snapped up short-term bills for a fourth straight week, to the tune of 345.8 billion yen.

($1 = 152.2100 yen)