Foreigners have piled into Japan’s stock market

According to Tokyo Stock Exchange’s latest data, foreign investors now own 32% of Japan’s stock market, up sharply from 5% in the 1970s, while locals hold just 17%. And the gap might keep growing: as US stocks slumped amid tariff threats in April, foreign investors pumped a net $8.3 billion (¥1.2 trillion) into Japanese equities — a sharp reversal from net outflows in the previous two months, per data from Japan Exchange Group.

Now, Japan is trying to lure its young, less trauma-ridden locals back into the market. The Tokyo Stock Exchange plans to lower the minimum investment threshold, aiming to make stocks more accessible, while the government expanded tax exemptions for retail investors last year. It’s also promoting financial literacy among millennials and Gen Zs. All of this might be starting to pay off: according to the Investment Trusts Association, 36% of people in their 20s in Japan invested in mutual funds, stocks, and bonds last year, up nearly 3x from 2016.