A visitor inside a building in Tokyo, Japan, sees Japan’s Nikkei stock average on the window glass as the average stock price soars past its all-time high set in December 1989, February 22, 2024. and an electronic screen displaying a stock price board.
May 6, 2024 11:53 (Japan time)
TOKYO (Jiji Press) – From January to March, nearly 50% of investments made through the new Japan Individual Savings Account (NISA) program were invested in Japanese stocks, a survey has found.
In the same quarter, the Nikkei Stock Average hit a record high for the first time in 34 years and rose even further to exceed the 40,000 yen level.
In place of the traditional NISA system, a new NISA tax-free system began in January that allows small investors to make large-scale tax-free investments.
According to a survey by the Japan Securities Dealers Association of 10 major traditional and online securities companies, including Nomura Securities and SBI Securities, of the purchases made through the new NISA program between January and March, Domestic stocks accounted for 47%, falling just short. 50 percent for mutual fund funds.
Kotaro Yoshida, managing director of Daiwa Securities, said of the movement of the company’s NISA account holders, “The amount of purchases via NISA has more than tripled from the previous year.”
“About 80% was invested in stocks and 20% in mutual funds, with most of the stock investments being invested in Japanese stocks,” Yoshida added.
Stable high dividend stocks were especially popular.
According to the online brokerage giant, the most popular investment among SBI Securities NISA account holders was Japan Tobacco, which has an annual dividend of 194 yen per share in 2024.
According to SBI Securities, Nippon Telegraph and Telephone Corporation and Mitsubishi UFJ Financial Group followed next.
Last March, the Tokyo Stock Exchange asked companies listed on the Tokyo Stock Exchange to pay more attention to capital efficiency and stock prices. As a result, more and more companies are placing importance on shareholder returns, including dividends.
On the other hand, some investors are bearish on Japanese stocks because, unlike markets in other countries such as the United States, where there are many powerful high-tech companies, the Japanese market is expected to shrink as the population declines.
Investment trusts that primarily invest in overseas stocks are popular among new NISA account holders. Many market participants are concerned about the “outflow of household funds to other countries.”
Ryohei Kobayashi, a popular YouTuber who teaches investment know-how to beginners, recommends investing in foreign stocks.
Kobayashi said that if Japan were able to “address labor shortages by actively welcoming immigrants and utilizing artificial intelligence systems,” investors would be able to think positively about investing in Japanese stocks.
