International investors poured just ¥328.1 billion into Japan’s equity markets, down sharply from December’s ¥874 billion inflow according to Ministry of Finance data released this week. Global economic jitters probably spooked investors, with rising interest rate fears and geopolitical tensions making them pull back from riskier bets. Bank of Japan Governor Kazuo Ueda kept rates ultra-low at the January 20 policy meeting, but that move seems to have backfired with foreign investors. Daiwa Securities noted on January 22 that the yen’s 3% rally against the dollar this month hurt returns for foreign investors, who face exchange rate losses when converting back to their home currencies. Jerome Powell’s hints about potential rate hikes have global investors rethinking their entire Asia allocation, not just Japan.