Their aggregate net buying since the fourth week of December reached 912 billion yen.
Overseas investors are welcoming the fact that "the yen's strength, which had been the biggest factor that made Japanese shares laggards, has been corrected," says Seiichiro Iwasawa, chief strategist at Nomura Securities Co.
They flocked to exporters on hopes of earnings improvements, lifting Toyota Motor Corp. shares 7 per cent last week.
Foreign investors are clearly picking up large-capitalization stocks such as financial service providers and real estate firms that tend to benefit from monetary easing.
The TSE's Topix Core 30, which comprises the largest-cap stocks on the bourse, advanced 5.4 per cent that week, outgaining the Nikkei Stock Average's 4.9 per cent rise.
On the other hand, individuals were net sellers for a ninth consecutive week, unloading 186.1 billion yen more in shares than they purchased.
But their valuation losses on stocks bought on margin narrowed to the lowest level in about a year, indicating that their purchasing power is improving.
Foreigners have a bullish outlook on Japanese stocks. They were net buyers of Nikkei futures to the tune of 53.6 billion yen last week, according to the Osaka Securities Exchange. (Nikkei)