How to Buy Japanese Stock
A benefit of the increasing integration between world economies is that investors are more cognizant of international equity markets than in prior decades. Many realize the considerable profit potential in foreign stocks. Japan is one such market that offers a well-developed stock exchange, but with many of the qualities that characterize more risky markets in developing countries. It is easier than ever before to access Japanese stocks directly and purchase them for your portfolio.
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Instructions
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Query your existing broker to determine if they have access to international stock markets. The demand for global trading is forcing many brokers to extend this added functionality to their clients but access to foreign markets is not usually turned on by default. If your broker does not offer this service, you will need to look elsewhere.
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Investigate the broker services of companies which extend international stock trading to their clients. E*Trade and Global Trading, Ltd. are two brokers through which you may purchase Japanese stocks. Most global trading accounts feature the major Asian indexes, including Japan and other countries.
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Apply for a global trading account at the broker of your choice. If your existing broker offers global trading, additional paperwork will usually be necessary to gain access to international markets.
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Search for stocks on your desired exchange. Brokers will usually list these by country, rather than the name of the exchange. The process of scanning and charting Japanese stocks is similar to domestic stocks, except that they are listed in their local currency, the Yen.
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Convert the price of the stock into your local currency. Some brokers may offer this feature automatically, but the native currency is always included as well. Be sure you are aware of the equivalent value of the stock in your base currency before purchasing shares.
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Calculate the time of day in Japan at the time you are making the purchase. As with domestic stocks, it is much less risky to make stock transactions during the regular session hours of the exchange on which the stock is traded.
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Buy the stock as you would any other domestic stock. The transaction will proceed similarly, however commission rates and trade execution time may vary slightly for global trading depending on your broker.
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Tips & Warnings
Investors seeking access to the overall Japanese stock market without focus on any individual stock may prefer an exchange trade fund covering the Nikkei index. These funds do not require access to global trading and are a good way to participate in a country's economic development without engaging in the research of individual companies.
