Japanese Stocks - Equities in Japan

JAPANESE STOCKS

Japan's Nikkei 225 Average is an index of the Japanese stock market similar to the Dow Jones Industrial Average or the S&P 500 Index. Japan's stock market had an extended multi-year rally that started in earnest in the 70's and accelerated sharply in the 80's. The Nikkei peaked on December 29,1989 at 38,915. The Nikkei is currently at at approximately 11,000.

HOW TO INVEST IN JAPAN

For most investors, investing in Japan funds and Japanese ADRs are the only ways to play the Japanese stock market, as no brokerage firms in Japan can open accounts for private foreign investors.  However, several brokers in the US and Hong Kong offer private investors the ability to purchase individual stocks listed in Japanese stock exchanges. 

Please see a list of Japan ADRs.

CONCLUSION

In the 1960s, Sir John Templeton bought Japanese stocks for as little as two times earnings.  At that time, Japan still had a reputation for producing cheap, flimsy products.  In the late 1980's and early 1990's, extreme optimism existed regarding the Japanese economy to overtake that of the United States, and Japanese stocks soared.  Soon after, the Japanese equity bubble burst.  Currently, strong pessimism exists among Japanese investors.  It is a sign of a Japanese stock market bottom.  Investors will be benefited in the long run.

ARTICLES:

Japanese Stock Trading (not for Gaijins)

Online Japanese Stock Trading Becomes Gold Rush