Lessons › Markets of the world › Japan: Tokyo's two sessions
World 6 · Markets of the world · lesson 5 · level 2
Japan: Tokyo's two sessions
Tokyo trades in a morning and an afternoon session with a lunch break, and shares usually come in units of 100.
In one line
Tokyo trades in a morning and an afternoon session with a lunch break, and shares usually come in units of 100.
Explained simply
Think of a school day with a lunch break: lessons in the morning, a pause, then lessons again in the afternoon. The Tokyo Stock Exchange works the same way, with a morning session, a lunch break and an afternoon session. And just like eggs sold by the box, Tokyo shares are usually bought in units of 100.
The lesson
The Tokyo Stock Exchange trades from 9:00 to 11:30 and from 12:30 to 15:30 Japan time, and the Nikkei 225 and TOPIX are its best-known indices. Shares normally trade in units of 100, so one unit costs the share price times 100. Each stock has a daily price limit based on its previous close, so its price cannot move beyond that day's range. The Financial Services Agency (FSA) is the main regulator.
A worked example
Illustrative example: a Tokyo share closed yesterday at ¥1,000, so one 100-share unit cost ¥100,000 (1,000 times 100). Its daily limit is ¥300, so today it can trade only between ¥700 (1,000 minus 300) and ¥1,300 (1,000 plus 300). If it rises all the way to the upper limit, one unit gains ¥30,000 (300 times 100).
The same idea at four levels
- Beginner. Tokyo has a morning session and an afternoon session with a lunch break in between.
- Foundation. The sessions run 9:00 to 11:30 and 12:30 to 15:30 Japan time, and shares trade in units of 100.
- Intermediate. One unit costs the share price times 100, so a ¥2,500 share needs ¥250,000 for one unit.
- Advanced. Each stock has a daily price limit set from the previous close: a stock that closed at ¥1,000 can trade only between ¥700 and ¥1,300 the next day.
- Expert. Experts watch the lunch break, since news can land during it and the afternoon can open away from the morning close, and they know a stock stuck at its limit may not fill orders.
Mistakes to avoid
- Forgetting the lunch break, which can leave a small gap between sessions.
- Assuming any number of shares can be ordered; standard orders are in 100-share units.
- Expecting an order to fill when a stock is stuck at its daily limit.
Check yourself
When is Tokyo's lunch break?
11:30 to 12:30 Japan time. The morning session ends at 11:30 and the afternoon starts at 12:30.
In what unit do Tokyo shares usually trade?
100 shares. The standard trading unit is 100 shares.
Which two indices are best known in Tokyo?
The Nikkei 225 and TOPIX. Nifty and Sensex are Indian indices.
Who is Japan's main financial regulator?
The Financial Services Agency (FSA). The FSA oversees Japan's financial system.
A share costs ¥2,500. How much does one 100-share unit cost?
¥250,000. 2,500 times 100 is 250,000.
Goal of this lesson: Know the basics of Japan's stock market: hours, trading units, indices, price limits and regulator.