Home to one of the largest financial markets globally, Japan is a clear industry giant in Forex trading. Commonly known as the Tokyo Stock Exchange (TSE), this global finance market lists several foreign corporations and is considered one of the hot pockets for professional investors.
It is crucial to have some fundamental facts before you begin trading in Japan.
- The Japanese Yen sits on a list of only seven currency pairs that make up almost 70% of the global forex trade volume. The USD/YEN pairing makes up 18% of the total trading volume, a few steps behind USD/Euro at 24%. Trading US stocks (米国株) in Japan is lucrative and high-value for local and international investors.
- The Tokyo stock exchange is the fifth largest fx trading center globally with a 4.5% global share. This market sits behind the UK, US, Singapore, and HongKong-in in that order.
- As to why you should consider trading US stocks in Japan, it is worth noting that up to 88% of all the trades in the fx market link to the US dollar.
Tips for Trading US stocks (米国株) in Japan
Invest with Japan-based Brokerage Firms
Japan has some very stringent laws when it comes to who they allow investing in their stock market. There are several restrictions placed on open investment accounts not based in the country. These limitations make it difficult for foreign investors to make headway.
The best way to penetrate the Japanese market is to find a local brokerage firm that does dollar trades or currency exchange-traded funds. If you are a foreign investor, establish whether the brokerage firm you choose can trade US stocks on your behalf.
Trade-in Small Units
Like most other exchanges, the TSE has a substantial amount of risk regarding stock trades. As a retail investor, it is advisable to start small to minimize risk. Most individual traders trade small units as a way to improve their chances of making profits regularly.
Note that these small trades are limited in terms of profit margin. However, they still allow you to trade more frequently and maintain your bottom line.
Focus on US stocks (米国株) in Japan
Experts have noted that US stock trades have slowly become more favorable compared to other investment portfolios. This results mainly from eliminating minimum charges and low trading fees attached to many American stock trades.
The step to lower US stock trade fees happened in 2019. It was a step made by some of the industry leaders in the TSE as a way to encourage traders to encourage respondents to prioritize US stock trades. It worked, as since then, the demand for US shares has increased systematically.
Find the right Broker
There is plenty of red tape involved when trading US securities in the Japanese fx market. For this reason, the single most critical requirement is to find a savvy, experienced, and efficient online broker. Again, note that few local brokers offer this kind of value, so you will need to take your time and find one that suits your needs.
Remember that your success in fx trading depends on the ultimate goal-what do you want to achieve? The firm you settle on should fit your goals and offer you unlimited access to dollar trades, market fluctuations, and price movements that allow you to make intelligent trades.
Understand TSE Market Dynamics
The Tokyo stock exchange is a key player in global fx trading. With such a massive reputation, you need to ensure that you do as much research as possible to avoid making costly mistakes. There are many securities that you can look into before you choose a suitable trading platform-such as;
- Nippon Individual Savings Account (NISA)-Tax-exempt investment account
- Currency Exchange Trade Funds-Bond funds; index or individual funds.
All these are options to consider when looking for a safe avenue to buy US stocks (米国株) in Japan.
Japan operates one of the biggest financial markets in the world, making it an attractive destination for foreign investment. If you are an investor searching for a lucrative investment opportunity, then try the TSE.