After the digitization of stock trading, investors can invest in stock exchanges located in different countries, and the Japanese stock exchange is not an exception to this major change. For Indian investors and traders, many ways are available to invest in the Japanese stock exchange and perform their trade to make wealth.
However, one may have to follow different protocols and regulations of the Japanese stock exchange. Read this article to get complete details on how you can start investing in the Japanese stock exchange and make a profit.
Understanding the Japanese Stock Market
Like the Indian stock exchange, Japan also has its own primary stock exchange called Tokyo Stock Exchange (TSE/TYO), founded in 1878. It stands in 6th position based on its market cap of over $5.16 trillion, with 3800 listed companies. This stock exchange has an indicator, Nikkei 400, that shows the performance metrics of its home companies like Suzuki, Sony, Toyota, and Honda.
In 1943, the Japanese Stock Exchange merged with almost 10 other exchanges reorganized after WWII. However, officially it opened in May 1949 to facilitate buying and selling of various securities. The trading time of TSE is based on Japan Standard Time (JST) which corresponds to GMT plus 9 hours. The Tokyo Exchange stays open from 9 am to 11:30 am and from 12:30 pm to 3 pm. TSE/TYO facilitates trading activities from Monday to Friday.
How to Invest in Japan Stock Market from India
To start investing in Japanese stocks, you need to follow the steps below.
Get Trading Account
You must open your trading account with a Japanese stockbroker. In India, we have many stock brokers like Zerodha, Groww, and even many banks to open Trading and Demat accounts. However, you can’t trade in the international market with this trading account. Thus, you need to find a reliable Japanese broker who can provide you shit facilities. Many stock brokers allow international investors to invest in the Japanese stock market by helping them open trading accounts; one such broker is SBI Shoken.
However, when selecting a Japanese-based stock broker, ensure they charge the lowest possible charges from international investors like you. There are many stock brokers who provide commission-free trading facilities as well as allow investors to trade in the stock market at the lowest charges.
If you choose Japanese stock brokers like SBI Shoken, you will get direct access to many Japanese banks helping you to transfer the fund into your trading account. Having a Japanese bank account looks compulsory as it helps you fund your trading account easily and initiate your upcoming trades in the market. Moreover, it will also make your withdrawal and other trading activities simpler.
Additionally, you can look for international stock brokers as they allow investors to trade in multiple stock exchanges from their native country. Moreover, these brokers charge fewer charges than Japanese stock brokers.
Once you have your trading account and the necessary funds, you can start your stock trading in the Japanese stock market. However, when trading, make sure to find some promising and credible sources to collect Japanese market news and the latest trends in the region. It will also help you if you know some technical analysis. It can gather more insights about the company you are willing to invest in.
What Securities Can You Buy in the Japanese Stock Exchange?
Below are some securities you can buy or sell on the Japanese stock exchange.
Japanese and foreign investors can buy and sell stocks of Japanese companies listed on its exchange. Most trades happen through Japanese stock brokers or international trading platforms.
Mutual Funds & ETF
If you are a passive investor and willing to put your money in ETFs, also called exchange-traded funds or mutual funds, you can invest in the same in the Japanese stock exchange as well. ETFs are traded regularly, and you can earn returns, dividends, and capital gains as an investor.
Why Invest in the Japanese Stock Market?
Japan is one of the world’s largest and most stable economies, and it’s the home of many tech companies renowned for their premium products and services. Tokyo Stock Exchange gives you direct access to invest in the world’s leading companies in one of the developed nations in Asia.
Equities have provided over 10% return to investors in the last decades. The enrichment in the corporate rate sector has also strengthened its economy and had a positive impact on its stock market.
Is There a Drawback to Investing in the Japanese Stock Market?
There are certain limitations in investing in the Japanese stock market; its sluggish historical growth is one such limitation. It has also seen many political issues as well as economic recovery problems. If you are investing in the Japanese stock market, you should have a higher risk-taking appetite. As Japan’s stock exchange and its companies might be new to you, making accurate investment decisions can be challenging.
So, in this article, we learned how to invest in the Japanese stock market from India. We also covered other topics you must know if you want to invest in the Tokyo Stock Exchange. However, while selecting a Japanese or international stock broker to participate in its stock exchange, it’s essential to do some research from your side on the charges put by these stock brokers. So, you can find one of the ideal stock brokers who facilitate trading activities in the Japanese stock market and provide several banks to open your account and ensure better customer support to avoid any financial risk that may happen due to poor service.