Economy February 2, 2026

Japanese Retail Investors Move into Global Funds, Fueled by Inflation Worries

Bank of America data shows January 2026 inflows topped 2 trillion yen as allocations shift toward gold and global equities

By Nina Shah
Japanese Retail Investors Move into Global Funds, Fueled by Inflation Worries

Japanese retail investors poured just over 2 trillion yen into major foreign asset funds in January 2026, a slight increase from the same month a year earlier, according to Bank of America. The early-year rush reflects seasonal use of NISA allowances and a reallocation toward gold and global funds amid rising concern about inflation and fiat currency credibility. Despite reduced flows into U.S.-only equity funds, demand for USD/JPY remains supported by continued exposure to U.S. equities within global funds.

Key Points

  • January 2026 foreign asset fund inflows from Japanese retail investors exceeded 2 trillion yen, slightly above January 2025 levels - indicative of the annual NISA-driven seasonal pattern.
  • Allocation shifts included a 220 billion yen increase into gold funds and a rotation within equities: U.S. equity inflows fell by 540 billion yen while global equity funds gained 440 billion yen.
  • Bank of America links these reallocations to a move toward "inflation portfolios" and growing concerns about the credibility of the U.S. dollar and fiat currencies; nonetheless, flows still support USD/JPY demand because global funds retain significant U.S. equity exposure.

Japanese retail investors allocated more than 2 trillion yen to major foreign asset funds in January 2026, marginally outpacing the inflows recorded in January 2025, according to research published by Bank of America. The January figure follows a well-established seasonal tendency tied to investor use of annual NISA growth-investment allowances early in the calendar year.

Bank of America noted that January 2025 had nearly 2 trillion yen of inflows, whereas the monthly average for the remainder of 2025 was 890 billion yen - underscoring the outsized nature of January activity relative to the rest of the year.

The composition of inflows showed some rotation within asset categories. Overall equity fund inflows were slightly lower than those in January 2025; however, a substantial increase in allocations to gold funds - amounting to 220 billion yen in January 2026 - helped lift the total amount invested in foreign assets.

Within equity strategies, Bank of America reported a marked rebalancing: U.S.-focused equity fund inflows declined by 540 billion yen, while global equity funds attracted an additional 440 billion yen. The research highlighted that investors appear to be reallocating toward so-called "inflation portfolios."

Bank of America researchers said Japanese retail investors are showing increased concerns about the credibility of the U.S. dollar and fiat currencies generally, and are shifting allocations accordingly.

Bank of America described this pattern as a notable change in retail investor behavior in Japan. Even so, the bank observed that the overall flow dynamics continue to underpin demand for the USD/JPY currency pair - a consequence of global funds holding sizeable positions in U.S. equities despite the internal shift away from U.S.-only equity funds.

The January flows therefore reflect both a seasonal uptick tied to NISA utilization and a tactical portfolio shift among Japanese retail investors toward assets perceived as hedges against inflation, including gold and broader global equity exposure. Bank of America's analysis links these reallocations to growing skepticism among retail investors regarding fiat currency credibility, while also noting that exposure to U.S. equities within global funds sustains dollar demand.


Methodological note - The figures and characterizations in this report are drawn from Bank of America research cited for January 2026 and comparative January 2025 and 2025-average monthly flows. The report describes investor allocation changes and the resulting implications for currency demand without attempting to ascribe causal explanations beyond those noted by the bank.

Risks

  • Changing retail allocations toward gold and global funds could alter demand patterns across foreign equity and precious metals markets - affecting market liquidity and volatility in equities, currencies, and commodities.
  • Heightened concern among retail investors about fiat currency credibility introduces uncertainty for FX markets, particularly USD/JPY, which could experience shifts if allocation trends persist or reverse.

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