Can I buy Japanese stocks in the US?

Japanese stocks, particularly those of the largest and most well-capitalized companies, are accessible to investors through a unique financial instrument known as American Depository Receipts (ADRs).

ADRs serve as surrogate securities that represent ownership in foreign companies, in this case, Japanese firms. They allow investors in the United States to invest in foreign companies without the complexities of international trading.

Many of these ADRs are listed on prominent U.S. exchanges. For instance, the NASDAQ and New York Stock Exchange (NYSE) host a significant number of ADRs, providing liquidity and ease of trading for investors.

In addition to being listed on major exchanges, some ADRs trade in the U.S. over-the-counter (OTC) stock market. This alternative trading venue offers another route for investors to buy and sell ADRs, particularly for those securities that may not meet the listing requirements of major exchanges.

The availability of ADRs in the U.S. market has significantly broadened the investment opportunities for American investors. They can now diversify their portfolios with exposure to top-tier Japanese companies without the need to navigate foreign exchange markets or international regulations.