If you are based outside of The Land of the Rising Sun and you want to buy Japanese stocks then the best way of gaining access to the country’s financial markets is by using the Equinix International Business Exchange (IBX) that is Tokyo TY3. Using this, you will have access to the very heart of the trading environment in Tokyo, including some of the country’s biggest stock market indexes.
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JPX Nikkei 400
Made up of 400 stocks which are in the first and second sections of the JASDAQ markets, the Mothers, and the Tokyo Stock Exchange. Stocks make onto the index based upon a range of different qualitative and quantitative factors, including Return on Equity (ROE).
Nikkei 225
Also known as just the Nikkei, this is the leading stock index in all of Japan. It consists of the top 225 largest companies listed on the Tokyo Stock Exchange. The only thing that you need to be aware of when trading on the index is that stocks are price weighted, which means that those companies with stock prices that are high, no matter what their level of market capitalization is, have the biggest impact on the index.
MSCI Japan Large Cap
In this there are around 105 stocks of large cap from the Tokyo Stock Exchange, which covers some 70 percent of the float adjusted, free market capitalization within the exchange.
TOPIX
A very popular stock index in Japan, the TOPIX is made up of those stocks that are in the first section of the Tokyo Stock Exchange. The index is weighted for market capitalization and so the weight of each stock on there is determined by its level of market capitalization.
MSCI Japan
The index tracks how around 300 of the mid cap and large cap Japanese stocks perform. Almost 85 percent of the float adjusted, free market capitalization in Japan is covered here.
FTSE Japan
This is made up of both mid cap and large cap Japanese stocks.
Directly Investing In Japanese Stocks
For those investors out there who are wanting to buy Japanese stocks directly can do this via the use of an international brokerage account or via a Japanese brokerage account. If you have some prior knowledge and understanding of the Japanese language, then you could use some of the following Japanese stockbrokers: DMM.com Securities, SBI Securities, GMO Click Securities, and Rakuten Securities.
A popular online broker for the purpose of investing directly in Japanese stocks is Interactive Brokers. With this broker, you are able to buy any stocks that are listed on CHI X Japan (CHIXJ), JAPANNEXT, Osaka Exchange (OSE JPN), and on the Tokyo Stock Exchange (TSEJ). With this broker being popular with those people who are professional stock traders, the company has recently introduced IBKR Lite for those people who are more casual type investors.
Other popular brokers for investing directly Japanese stocks include Monex Securities, Saxo Markets, and Charles Schwab. Of course there are many others that you may prefer and have experience of using. Check the best websites for stock research to get the right stocks, and you can also use this guide to diversify your investments.
