Amid economic uncertainty under the Donald Trump administration, overseas investors flocked to the Japanese stock market last year in search of safe havens, with their purchases reaching their highest level since 2013.According to data from the Tokyo Stock Exchange, overseas investors made net purchases of approximately 5.4 trillion yen (about $35 billion) in Japanese equities in 2025, a figure 35 times higher than the 2024 purchase volume.Foreign investors’ purchases were second only to those of domestic Japanese firms, which net-purchased 10.5 trillion yen worth of domestic stocks amid a sustained wave of share buybacks.Japanese stock market analyst Pelham Smithers wrote in a report that last year’s “aggressive” buying by foreign investors stemmed primarily from optimistic expectations for the Japanese economy, driven by the Bank of Japan’s (Bank of Japan (BOJ)) steady progress in normalizing monetary policy. He wrote: “Foreign investors tend to be strongly driven by economic fundamentals and economic expectations.”However, Smithers cautioned that as Japanese stock indices have risen to record highs, foreign investors may become more selective this year.