Japanese investment in foreign stocks hit 4-month high as Fed cut bets mount

Sept 11 (Reuters) - Japanese weekly net investments in foreign stocks were at their highest in four months last week, on expectations that the Federal Reserve would cut interest rates at its September policy meeting to support the cooling U.S. labour market.

According to Japan's Ministry of Finance data, Japanese investors bought a net 891.1 billion yen ($6.04 billion) worth of foreign stocks during the week to September 6, the most since the week to May 3.

A U.S. Labor Department report last week showed the unemployment rate increased to nearly a four-year high of 4.3% in August, lifting market bets that the Fed might cut interest rates by as much as 50 basis points next Wednesday. Markets fully expect the central bank to cut rates by at least 25 bps, CME's FedWatch tool showed.

Japanese investors have so far pumped a massive 4.6 trillion yen in overseas equities markets this year, more than a fivefold increase from 889 billion yen net investments in the same period last year.

They also bought foreign short-term bills worth 749.7 billion yen and long-term bonds of 245.1 billion yen, extending their net purchases into a second successive week.

Meanwhile in Japan, local stocks drew approximately 108.6 billion yen worth of net foreign inflows, after two straight weeks of profit-taking by outsiders.

Foreigners also added a net 927.3 billion yen worth of Japanese short-term bills but sold long-term bonds worth a net $604.5 billion yen.

($1 = 147.4300 yen)

Japanese investments in stocks abroad

Japanese investments in overseas debt securities

Foreign flows into Japanese stocks

Foreign flows into Japanese debt securities