Data released on Thursday indicates overseas investors sold Japanese shares for a second consecutive week through June 6th.

This move followed a disappointing earnings report from Broadcom, which heightened market concerns that the tech-led rally may have gone too far, prompting investors to take profits in richly valued technology stocks.

Additionally, a strong U.S. jobs report that could lead the Federal Reserve to maintain a hawkish stance for longer, coupled with ongoing tensions in the Middle East, also weighed on market sentiment.

According to figures from Japan's Ministry of Finance, foreign investors were net sellers of ¥701.0 billion (US$4.37 billion) in Japanese stocks this week, a significant increase from the previous week's net selling of ¥491.5 billion.

The Nikkei 225 index has retreated approximately 7.3% from the all-time high of 68,786.49 points it reached last week.

Despite the recent net selling, foreign investors have still injected a net total of about ¥10.63 trillion into the Japanese stock market so far this year, compared to net purchases of only around ¥1.26 trillion during the same period last year.