Let’s Know About Japanese Stock Market
The various traits of the Stock Market of each country differ as per the economy of the country. Each country has a different background, culture and economic condition. All these factors play important roles in determining the nature of market of any country. Japan is no exception. Japanese Stock Market is one of the biggest stock markets of the world. The Japanese stock market is located in its capital, Tokyo. The Japanese stock market is commonly known as Nikkei. It is one of the biggest stock market of the world, in fact it is the second largest stock market of the world. It has 2271 domestic and 31 foreign companies in its list with a market capitalization of about five trillion USD.
There are two prominent features of Japanese Stock Market. The first feature is related with the stock prices. It has been noted in the past ten years that stock prices in the stock market have been extremely volatile. This continuous change in rates has been a significant feature of the Japanese Stock Market. This volatility of prices has a major impact on the overall economic development of Japan. The second most prominent feature of Japanese Stock Exchange is that it is dominated by cross shareholding and is also affected by the stagnant individual stock ownership. These are very important factors that one needs to study to understand the stock market of Japan or overall Japanese economy. Japan is one of the world's most industrialized countries. It has a free market economy. This means that any company of the world can start trading in Japan and Foreign Direct Investment is possible. This makes Japan the third country in the Purchasing Power Parity (PPP) model. The economy of Japan is highly efficient and competitive in most of the sectors. There is one very big drawback with Japan. It lacks a lot in natural resources. It has to buy all the raw materials that are required to run its country's industry from various other countries. This has hampered its growth quiet a lot. If Japan had the natural resources then it would have been the most industrialized nation of the world. But Japan has overcome this problem by its hard work to become one of the strongest economies of the world. This strength of its economy shows in the Japanese Stock Exchange. Japan has developed with a rapid pace, thanks to the cooperation between the government and the industry. There are other factors also that helped it grow like good work ethics, use of advanced technology and less expenditure on its defense. So, all these factors are responsible for making the Japanese Stock Market one of the biggest stock exchanges of the world and helping its economy grow faster. |
