Japanese investors appear to be continuing to plough money into domestic equities despite expectations that Japan's aggressive push to reflate its economy, dubbed "Abenomics", would spark a massive flight of investment out of the country.
They sold 78 billion yen ($US785 million) of foreign currency-denominated toshins, or investment trusts, last week, although the pace of selling slowed from the previous week of
254 billion yen, according to Nomura.
Nomura said in a report that Japanese investors were taking advantage of the weak yen to lock in profits.
Analysts had expected Japanese investors would eventually send their investment aboard, especially emerging markets, to seek higher returns after the Bank of Japan shocked the financial markets on April 4 with a huge stimulus programme.
But for now, Japanese investors were sticking with domestic assets, especially Japanese equities, which have rallied sharply since mid-November when Shinzo Abe, who became prime
minister in December, promised bold expansionary monetary and fiscal policies in his election campaign.
Japanese investors also ploughed 162 billion yen into toshins investing in domestic assets, Nomura said.
"If you are of the opinion that the US dollar could continue to be strong, then I think you would have every reason to be concerned about Asia emerging markets to start with. They are not going to perform well," said a senior trader at a foreign bank in Tokyo.
"Are we seeing that flow? No. Retail Japan are buying Japanese equities. Retail Japan are not buying emerging market equities. Retail Japan aren't even buying emerging market bonds as far as I can tell."
Nomura data also showed some Japanese investors were keeping a proportion of foreign currency exposure in their toshin investments.
Last week, they were net buyers of 59 billion yen worth of currency selection-type toshins, which can invest in Japanese assets but offer hedging exposure to foreign currency, such as Brazilian real, Turkish lira and Mexican peso.
Nomura said in this type of toshin, net buying of Japanese equities as underlying assets accelerated further, recording the biggest weekly net purchases ever.
Tokyo's Nikkei stock average has rallied 58 per cent and the yen has weakened 23 per cent against the dollar since mid-November.