Foreign investors sold Japanese stocks in the week ended Dec. 2, as sharp gains in the yen raised concerns about a hit to auto and other exporters' earnings, with investors also worried about weak domestic economic data.

In their biggest weekly net selling since Sept. 30, foreigners offloaded a net 781.55 billion yen ($5.71 billion) worth of Japanese equities, compared with net purchases of 987 billion yen in the previous week, data from exchanges showed.

Overseas investors exited derivatives worth a net 804.22 billion yen but purchased cash equities of 22.67 billion yen. According to the data, they have been net sellers of about 3.14 trillion yen worth of Japanese stocks so far this year.

Weighing on investor sentiment, data showed last week that factory activity in Japan fell for a second consecutive month in October as global demand weakened and supply bottlenecks lingered.

Last week, the Topix index fell 3.17% and the Nikkei share average shed 1.79%.

Data showed cross-border investors bought a net 994.3 billion yen worth of Japanese bonds last week after selling 5.53 trillion yen worth in the previous week.

Meanwhile, Japanese investors purchased foreign equities of about 618 billion yen while securing overseas bonds worth a net 284.4 billion yen after six straight weeks of selling. ($1 = 136.9000 yen)

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; Editing by Subhranshu Sahu)