Foreign investors staged their biggest weekly selloff in Japanese shares in the week ended June 27, locking in gains in technology stocks, Reuters reported. Sentiment on the Street was further dampened by concerns over stretched AI valuations and debt-fuelled spending on artificial intelligence.Foreign investors dumped a net 1.82 trillion yen ($11.2 billion) of Japanese stocks last week, marking the biggest weekly outflow since March 28, data from Japan's Ministry of Finance showed Thursday. Japanese long-term bonds saw foreign outflows for the fourth consecutive week, totalling 493.7 billion yen. Foreign investors also sold 2.43 trillion yen in short-term bills, Reuters reported. As overseas investors pulled out of Japanese markets, domestic retail investors stepped in to cushion the selloff, pruchasing a record number of shares during the week, Bloomber reported. According to data from Japan Exchange Group Inc, Local Japense retail investors bought a net ¥950 billion ($5.9 billion) in equities, offering support to the market amid a tech selloff sent equity gauges plunging, Bloomber reported. The tech-heavy Nikkei 225 gauge dropped 2.7% during the period.Despite last week's slump, the benchmark Nikkei 225 logged its strongest quarterly gain on record, powered by a global rally in AI-linked technology stocks. But the exuberance surrounding the sector appears to be beginning to fade as investors question the sustainability of lofty valuations and heavy AI spending, leaving the market vulnerable to bouts of volatility and sharp selloffs.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)