Asian investors increased net purchases of U.S. equities despite factors encouraging capital to return to domestic markets, including a strong local stock market, a weaker currency and the launch of repatriation investment accounts.
According to the U.S. Treasury Department, Asian investors recorded net purchases of U.S. stocks totaling $11.5 billion in January, nearly four times higher than a year earlier. Among major economies excluding tax havens, the figure ranks second globally after France.
Analysis of the Treasury’s International Capital (TIC) data showed one of Asia’s net buying of $11.5 billion was second only to France’s $12.1 billion, excluding Ireland, which recorded $17.5 billion but is considered a tax haven.
Singapore and Norway posted net sales of $2 billion and $17.8 billion, respectively, while Switzerland recorded net purchases of $6.8 billion, lower than South Korea.
Compared with other Asian economies, South Korea’s overseas equity investment stood out. China recorded $3.7 billion, Taiwan $2.6 billion, and Japan $920 million, all significantly below South Korea’s level.
Net Purchases Rise Despite Repatriation Pressures
January’s net purchases were nearly double the 2025 monthly average of $6.1 billion, marking the second-highest monthly total on record after April 2025, when purchases reached $11.7 billion. The figure accounts for about 15.9% of South Korea’s total net purchases of $73.6 billion in U.S. equities last year.
While investors across 77 countries recorded combined net sales of $20.6 billion in January, South Korea maintained net buying, diverging from the broader trend.
Earlier expectations suggested outbound investment could slow due to the launch of repatriation investment accounts (RIA) and concerns over exchange-rate losses. However, TIC data indicates that capital repatriation remained limited in January.
Experts said the continued appeal of the U.S. market sustained buying momentum
Yang Jun-seok, an economics professor at the Catholic University of Korea, said heightened volatility in U.S. markets may have had some negative impact but did not significantly reduce market attractiveness.
“Liquidity and volatility increased simultaneously, boosting market participation,” he said, adding that policy uncertainty and remarks from U.S. President Donald Trump influenced investment flows.
Some analysts said inflows may slow amid rising uncertainty, including geopolitical tensions and the impact of repatriation policies.
Lee Young-hwa, an economist at Busan Bank, said while a sharp reversal is unlikely given the strength of the U.S. market, inflows could moderate.
“South Korea’s domestic market has shown relatively strong performance, and currency uncertainty has increased, raising concerns over exchange-rate losses,” he said. “There is room for some funds to return to the domestic market.”
As of April, more than 114,000 RIA accounts had been opened. The accounts, launched in March, held a combined balance of about $320 million.
South Korean investors’ total holdings of U.S. securities, including stocks and bonds, rose 2.09% month over month to $889.3 billion in January. By country, the largest holders were the United Kingdom with $3.8 trillion, followed by the Cayman Islands with $3.3 trillion, Canada with $3.1 trillion, and Japan with $3.0 trillion.