Overseas Japanese Listings and ADRs

If you don't have the time or inclination to study individual Japanese stocks, but just want exposure to the Japanese stock market in general, try the closed-end Japan funds, the Japan Equity Fund (JEQ) and the Japan OTC fund (JOF).

 

In the US, many major Japanese companies have full listings or liquid ADRs, which are certificates issued by a US depositary bank representing foreign shares held by the bank, usually by a branch or correspondent in the country of issue.

Here is a list of Japanese stocks I follow, which are also listed on the NYSE:

Advantest Corporation (ATE)
Canon, Inc. (CAJ)
Hitachi, Ltd. (HIT)
Honda Motor Co., Ltd. (HMC)
Konami Corporation (KNM)
Kubota Corporation (KUB)
Kyocera Corporation (KYO)
Matsushita Electric Industrial Co., Ltd. (MC)
Mitsubishi Tokyo Financial Group, Inc. (MTF)
Nidec Corporation (NJ)
Nippon Telegraph and Telephone Corp. (NTT)
Nissin Co., LTD. (NIS)
Nomura Holding, Inc. (NMR)
NTT DoCoMo, Inc. (DCM)
Orix Corporation. (IX)
Pioneer Corporation (PIO)
Sony Corporation (SNE)
TDK Corporation (TDK)
Toyota Motor Corporation (TM)

The ten most active from the table below are FUJIY, HMC, SNE, MTF, CAJ, NTT, NSANY, ATE, TM, and DCM. Other active ones are HIT and KYO.

Many other Japanese companies have an illiquid OTC ADR, which means that these are much better to trade in Tokyo, unless you do not mind the wide bid-offer spread and are just going to buy and hold.

When buying individual US-denominated Japanese stocks, always bear in mind the effect of foreign exchange fluctuations. In 2004, the USD-JPY pair encountered some extreme trading moves.

There are also many excellent Japanese funds. The three highest S&P-rated Japanese funds (all 5-star), when last I looked about a year ago, are:

(1) Sirius Japan Opportunities Fund, (1-year/3-year average returns = 60.96%/63.33%), R.S.I. Conseils SA Luxembourg 11 Rue Aldringen, , Luxembourg, Luxembourg, L-2960 Tel : 352-46-54-52 Fax : 352-46-81-92-543

(2) Nippon Growth Fund Ltd, (1-year/3-year average returns = 82.20%/54.75%), Banque Baring Brothers (Suisse) SA (no address available)

(3) Vitruvius Japanese Equity Eur (1-year/3-year average returns = 76.32%/53.01%), Belgrave Capital Management Ltd, 5 Lower Belgrave Street, London, United Kingdom, SW1W ONR Tel : 44-020-78241200 Fax : 44-020-78241202


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