Mar 22 (newsonjapan.com) - The Japanese stock market is one of the most popular stock markets in the world. Japan’s stock market features several prominent multinational companies that have amazing reputations, including Toshiba, Mitsubishi, Sharp, Fujitsu, Sony, Panasonic, and Canon.
Over the last few years, the Japanese stock market has grown in popularity. So much so, that it is now too large for skilled investors to ignore. Keep reading below to find out everything you need to know about the Japanese stock market, and why now might be the right time to invest.
The Performance of the Japanese Stock Market
Thirty years ago, Japan's Imperial Palace was believed to be worth more than the combined value of all the property in California. Not only that, but the stock market had also risen to almost 39,000 at the end of 1989. However, this exceptional boom was soon followed by a catastrophic bust. The economy experienced a disastrous period. Although often referred to as the “lost decade”, this period actually lasted over 20 years. In fact, even 30 years on, the Japanese stock market is still nowhere near back to its full potential.
However, the new Prime Minister of Japan has sought to improve the economic performance of the country, and it looks like he’s doing an excellent job. Research has shown that the Japanese stock market has been outperforming the US equities market for over 6 years now. This article explains in more detail why Japanese stocks are a better buy than US stocks.
This trend is likely to continue. Many investors believe that Japan will vanquish some old demons as it recovers from the COVID-19 pandemic. Early signs are the strategy is working. The Japanese economy is already nearly back to pre-pandemic levels.
The Main Indices
When it comes to investing in the Japanese stock market, there are several options available for you to choose from. Some of the main stock exchanges include:
• The Nagoya Stock Exchange (NSE) – The NSE is one of the most well-known stock markets in the world, however, it is rarely used by UK investors. The main reason for this is because this stock market is price-weighted, not market-capitalization-weighted. Many investors see this way of investing as inferior.
• The Tokyo Stock Exchange (TSE) - Founded in 1878, the TSE is now one of the biggest stock exchanges in the world with over 3500 listed companies as of 2016. Often known as the Nikkei 225.
• The Fukuoka Stock Exchange (FSE)
• The Sapporo Securities Exchange (SSE)
There are also several other indexes that investors can choose from, including the SPC-Nikkei 400, the TOPIX, and the well-known MSCI index.
How to Invest in the Japanese Stock Market
If you are a skilled trader who wants to invest in the Japanese stock market, a worthwhile option may be using MT4 (Metatrader 4), a popular trading platform due to its advanced, customizable features that allow trading automation and market analysis tailored to individual needs. Available from online brokers such as easyMarkets, with MT4 you can gain access to trading the Nikkei 225, or individual stocks like Toyota or Sony, via contracts for difference.
Japan has the world’s third-largest economy in the world and one of the largest stock markets, the Nikkei 225. It is also home to some of the world’s most famous companies and has become well known as a leader in new business techniques and technologies from just-in-time delivery methods to robotics and automation. Thanks to this, Japan has become a place investors cannot ignore.
