The stock market in Japan is the 3rd largest in the globe, and the Tokyo Stock Exchange houses some of the well-known and most prominent companies in the world, like Panasonic, Sony, and Toyota. No matter where you are in the world, the accessibility for trading stocks in Japan promises you lucrative returns if done correctly. Now the question is how should you trade in the Japanese stock market, and what are the trends you should watch out for?
Kavan Choksi Japan– Know more about the stock markets in Japan
Kavan Choksi Japan is a highly reputable and respected business and finance expert known for his valuable expertise in Economics and Finance. When it comes to the stock market in Japan, he says investors from across the globe come here to trade stocks daily. They can purchase and sell shares in publicly traded companies in the nation.
The stock market is regulated and controlled by The Tokyo Stock Exchange, in a similar manner to The New York Stock Exchange, which helps investors purchase and sell companies that are publicly listed in the USA.
In America, the New York Stock Exchange, along with the Nasdaq Stock Exchange, is the largest in the globe according to the market capitalization of the companies listed on them. The TSE, or The Tokyo Stock Exchange, is the 3rd largest and was established in 1878. It is now owned by The Japan Exchange Group, which was formed from the merger between the Tokyo Stock Exchange and the Osaka Securities Stock Exchange in 2013.
The real estate and equity bubble burst in the 1990s
At the start of 1990, the stock market in Japan crashed, sending the prices of properties dipping by 87%. The Bank of Japan had to slash the rates of interest from 6% to 0.05% by the year 1995. This era in Japan is often known as the “lost decade.”
However, today in 2022, many traders believe that Japan has finally arisen from this slump of 20 years. The financial crisis in 2008 and the COVID-19 pandemic added to the nation’s woes, with the economy collapsing again.
Abenomics reforms
In 2012, the Prime Minister of Japan, Shinzo Abe, started a program for economic reforms that came to be known as Abenomics in the nation. A segment of this Plan was to begin the policy of quantitative easing to reduce the Yen’s value to make the nation’s exports cheaper (this constitutes a large portion of the economy of Japan).
Kavan Choksi Japan adds the above was targeted to resurrect the economy of Japan; however, its progress was plodding, and it failed to revitalize the nation’s economy. However, today, the Bank of Japan is rolling out a new strategy to increase stock prices with the hope that consumer spending in the nation will rise. It is buying exchange-traded funds (ETFs) that hold publicly listed organizations in a bid to raise the prices of stocks.
The Bank of Japan today is one of the largest stockholders listed on the TSE and a top owner out of a total of five owners of 81 diverse companies in the country.