Foreigners increase buying in Japan stocks in week ended Oct 18

Oct 25 (Reuters) - Foreigners were net buyers of Japanese stocks for a second straight week ended Oct. 18, as optimism around the Brexit deal and rising hopes of Washington and Beijing signing the initial phase of a trade deal next month improved risk sentiment.

Overseas investors bought a net 1.22 trillion yen ($11.23 billion) of Japanese stocks, including cash equities and futures, highest since mid-September 2018, data from the Japanese stock exchanges showed.

Cross-border investors bought a net 662.74 billion yen in derivative markets and 556.38 billion yen in cash markets, data showed.

Last week, the Nikkei index gained 3.2% while the Topix index surged 1.7%, both marking their biggest weekly gain in five weeks.

The rally in local shares came as the UK and the European Union struck a long-awaited Brexit deal last week, however, British Prime Minister Boris Johnson faces a deadlock with the parliament, over it’s timing.

Meanwhile, progress in the initial phase of a U.S.-China trade deal also supported local shares.

U.S. President Donald Trump outlined a partial trade deal to end it’s 15-month long trade war with China on Oct. 11, that may get signed during a summit of Asia-Pacific Economic Cooperation countries on Nov. 16-17.

This week, the Nikkei gained for a fourth successive week and hit over a year high of 22,819.92.

Japanese investors bought 42.3 billion yen worth of overseas equities during the week, their fourth straight week of net purchase, data from the Ministry of Finance showed. ($1 = 108.6300 yen)

Reporting by Gaurav Dogra and Patturaja Murugaboopathy; Editing by Rashmi Aich