Japanese Stocks – Taking Stock

The Japanese economy has seen risen phoenix like after World War II. Japanese Stocks soared in value during the 1980's and 1990's . This article will provide the reader with an overview of the stock market in Japan.

At one point of time, Japan had a reputation of a country which produced inexpensive and flimsy goods. This was during the 1950s and 1960s. Japan had flooded world markets with inexpensive cars, cameras and all sorts of electronic equipment. Stock prices of major companies were low and stocks could be easily purchased.

This perception rapidly changed during the 1980s and 1990s. Japan began focusing on quality. It began consolidating its own overseas markets and overrunning local competition. During this period the economy was on a bull run. Investors were confident that the Japanese economy would outrun the American one. Investors were upbeat and bouyant.

We will take a short digression here. Lets for a short while take a look at the major indexes which are indicative of the Japanese stock market. The Nikkei 225 is a stock market index of the Tokyo Stock Exchange. It is one of the most watched of Indexes in Asia. Another major stock market index is of the Tokyo Stock Exchange is the Topix.

During the 1980s and 1990s when bulls had the run of the Japanese Stock Market, the Nikkei peaked at 38,915 points on December 29th 1989. During this time Japan accounted for 45 percent of the entire global capitalization. The bubble burst soon after that. The Japanese Stock Market crashed soon afterwards. What began was a 15 year period during which the bears came back with a vengeance.

The 15 year long bearish period which started during early 1990s and lasted till 2005 has left an impact on the Psyche of the average investor in Japan. The Nikkei's highest value between 2000 and 2005 was an approximate 18,000 points. If you compare this value with what the Nikkei achieved in 1989, then I am sure you will come to the conclusion that Japanese Stock investors are not very overtly optimistic and are treading a cautious path.

Things are changing gradually for the better. It is the right time for investing in Japanese Stocks. If you are a interested in playing the stock market then Japanese Funds and ADRs are a very good option. You should also consider the point that no brokerage firm which is based in Japan can open investor accounts for foreigners. If you are interested in investing directly in Japanese stocks then the only option that you have is of approaching brokers which are based in the US, Hong Kong or Singapore amongst other places.