Trading in Japan is quite different from what investors are used to in other countries. The process, terminology, and culture are unique to Japan. However, with little research and guidance, Japanese investors can successfully trade stocks. There are a few steps that Japanese investors need to take to start trading. Here are a few tips from Saxo Bank US Stocks.
Open a brokerage account
Investors must first open a brokerage account to start trading stocks in Japan. They can do this by going to a physical branch of a broker or by signing up online. When opening an account, investors will be asked to provide personal information such as their name, date of birth, and address. Japanese investors will also be required to provide their My Number, a 12-digit identification number assigned to every Japanese resident. Once the account is opened, investors can deposit money and start trading.
Choose what stocks to buy
The next step for Japanese investors is to decide what stocks they want to buy. Investors can choose from various stocks, including Japanese and foreign stocks. Japanese investors may want to consider buying stocks of companies that they are familiar with or that have a good reputation. It is also essential to research the stock before investing.
Place an order
After choosing what stocks to buy, investors need to place an order. Traders can do this online or over the phone. When placing an order, investors need to specify the type of order, the stock ticker symbol, the number of shares, and the price. There are different types of orders, such as market and limit orders. Market orders are executed at the current market price, while limit orders are executed at a specified price.
Monitor your positions
Once the order is placed, investors need to monitor their positions. They can do this online or through a broker. Investors must watch the stock price and the number of shares they own. Investors may want to sell their shares if the stock price goes down. On the other hand, if the stock price goes up, investors may want to hold onto their shares or buy more.
Sell your shares
When investors are ready to sell their shares, they need to place a sell order. Traders can do this online or over the phone. When placing a sell order, investors need to specify the type of order, the stock ticker symbol, the number of shares, and the price. There are different types of orders, such as market and limit orders. Market orders are executed at the current market price, while limit orders are executed at a specified price.
Risks of trading stocks in Japan
One of the risks of trading stocks in Japan is the language barrier. Most brokerages and websites are in Japanese, so investors need to be able to read and understand Japanese. It can be a difficult task for foreigners who are not familiar with the language.
Lack of liquidity
Another risk of trading stocks in Japan is the lack of liquidity. Japanese stocks are not as liquid as stocks in other developed countries. Buying or selling Japanese stocks may be difficult, especially during market volatility.
Another risk of trading stocks in Japan is the regulatory barriers. The Japanese government has strict regulations on foreign ownership of stocks, making it difficult for foreigners to trade Japanese stocks.
Benefits of trading stocks in Japan
One of the benefits of trading stocks in Japan is diversification. Japanese stocks can provide diversification for investors primarily invested in other countries. Investors can reduce the risk to their portfolios by investing in Japanese stocks.
Another benefit of trading stocks in Japan is stability. The Japanese economy is one of the most stable economies in the world. It provides a certain degree of stability for investors worried about market volatility.
Another benefit of trading stocks in Japan is growth potential. This growth potential can provide investors with an opportunity to profit from investing in Japanese stocks.
Another benefit of trading stocks in Japan is familiarity. Japanese investors may be familiar with some companies listed on the stock exchange, making it easier to research and invest in them.