Japanese retail investors ramped up their buying of foreign securities via toshins, or investment trusts, this month after they sold a large amount in December ahead of a capital gains tax hike, according to Nomura.

Dollar-denominated ssets remained their most popular choice, it said in a note.

Retail investors bought a net 149 billion yen ($1.4 billion) of foreign securities in the week starting Jan. 5 after they unloaded a net 641 billion yen worth last month.

Japan doubled the capital gains tax on Jan. 1 to 20 percent from 10 percent following the expiration of a special tax break given to support share prices. As a result, many investors took profits before the increase.

"Toshin momentum already recovered in January though, partly due to the introduction of NISA. We expect toshin momentum to remain strong in 2014," Nomura said in a note, referring to tax-free Nippon Individual Savings Accounts.

The government-sponsored scheme is aimed at driving massive Japanese savings into stocks and mutual funds. The Japanese government projects NISA accounts could draw more than $250 billion by 2020.

Nomura said retail investors appeared to be shifting their preferences towards G10 currencies, especially the dollar, from emerging currencies.The outstanding amount of U.S. securities in toshins rose to 12.8 trillion yen, accounting for 49 percent of the total foreign exposure, the largest share since November 2003, it said.

Interest in euro assets was gradually recovering as the euro zone economy was on the mend following the region's debt crisis, while the share of Australian and Brazilian assets continued to slow in December, it added.