By Patturaja Murugaboopathy and Brigid Riley
(Reuters) – Japanese stocks have started the year strongly and analysts say it could be a signal of further gains and expect the inflows that pushed the Nikkei to three-decade highs will keep coming.
Japanese equities received a net 1.16 trillion yen ($7.8 billion) from abroad last month, adding to inflow of 6.3 trillion yen last year, the highest since at least 2014, according to exchange data.
The Nikkei rose 8.4% for the month, and the broader Topix 7.8% – both hitting 34-year highs and outperforming global stocks’ which added 0.5%.
Morgan Stanley says there is a “somewhat positive” correlation between January and full-year gains. Seven of the last 10 times full-year gains have followed January rises.
Most focus is on whether inflows will extend and dealers and analysts say they will because global allocation remains low and because domestic investors have been sellers into the rally.
“This…
