Understanding the Japanese Stock Market

Understanding the Japanese Stock Market

By: Frank Vanderlugt

In today’s financial world, investors need to be aware of more than just the New York Stock Exchange. It helps to keep up with foreign markets. You definitely should keep up on the Japanese Stock Market news. The Japanese Stock Market is known as the Tokyo Securities and Stock Exchange. This market is the second largest in the world. Only the New York Stock Exchange is bigger.

In fact, Japan has eight stock exchanges. The largest by far is the Tokyo Securities and Stock Exchange, which lists the largest percentage of domestic companies that are publicly traded. This exchange was initially established in 1878. In the 1980s and 1990s, it grew rapidly before falling in value. Currently, though, it remains one of the world’s top three exchanges.

This exchange has three different tiers. The First Section is for large companies, while the Second Section is for companies that fall into the mid-sized range. Finally a section exists for new companies that are just starting out, called Mother companies. Currently the First section contains the most companies.

The exchange has had its share of difficulties. When it installed new software in November, 2005, problems caused the system not to operate properly. This downtime cut significantly into the trading day, causing problems and financial losses.

At the moment, the London Stock Exchange and the Tokyo Exchange are exploring products that can be jointly traded. This alliance will further expand the importance of the Tokyo Securities and Stock Exchange.

If you are interested in investing, you should contact a reputable broker. Whenever you consider investing in a foreign market, you have additional risks to consider. Certainly, you can make money in foreign markets, but it’s vital you know what you’re doing. You need to know how to spot a true opportunity. Of course, if you do invest in foreign markets, you’ll be able to diversify your portfolio. If you’re careful, this can be very good thing for you.

Obviously, there are many successful companies spread throughout the globe. Some of these companies have phenomenal growth rates, so investing in them can really yield a high rate of return. Of course, you’ll need to consider things such as the exchange rate in relation to the US dollar.

Naturally another major consideration is the stability of the countries in which foreign businesses operate. Sometimes political upheaval will hit a country, impacting the businesses located there. You need to consider the political and economic stability of the country in which the business you are considering is located.

Although there are many international stock markets from which you can choose, you’ll definitely want to consider the stocks on the Tokyo Stock Exchange. When it comes to foreign investments, this stock market has many opportunities for the skilled investor. If you do your research and keep up on the foreign markets, you may find some excellent investments.

Frank j Vanderlugt owns and operates http://www.japanese-stockmarket-now.com Japanese Stock Market

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