Japanese stocks rally fizzles out

Japan's record share market rally earlier this year is looking like a distant memory as foreign investors sell off stocks in a sluggish economy.

Citigroup and abrdn are among banks that have turned more pessimistic toward the nation's equities as the outlook for corporate governance reform and the Bank of Japan's monetary policy remains uncertain. A fund manager survey by Bank of America showed about a third of respondents believe the market has peaked.

Foreign investors, who helped push up Japanese shares to a record high just a few months ago, became net sellers for a fourth straight week through June 14, the longest streak since September, according to Tokyo Stock Exchange data.

After reaching an all-time high on March 22, blue-chip Nikkei 225 index has fallen 5.6 percent compared with a 1 percent gain during the period for the MSCI AC Asia Pacific Index, and a 4.4 percent advance in the US's S&P 500 Index.