After exploring stock markets around the world, I still find Japanese stocks particularly appealing. Many Japanese companies have strong balance sheets, relatively low P/E ratios, and diversified revenue sources across different countries and regions.
Another advantage for me is familiarity. Having lived in Japan for several years and being able to speak Japanese, I find it easier to research Japanese companies, read local information, and follow market developments directly from Japanese sources.
As of now, the only way to trade Japanese stocks is via Interactive Brokers (IBKR).
In this article, I’ll show you how to buy Japanese stocks from Malaysia using Interactive Brokers (IBKR), including how to fund it, find Japanese stocks, and place your first order.
How to buy Japanese Stocks in Malaysia with IBKR
Step 1: Fund your IBKR account
Log in to IBKR and click “Transfer & Pay”, then select “Transfer Funds.”
Under Deposit Funds, click “Select.”
Click “Use a new deposit method.”
Funding in JPY — Recommended for Beginners
If you already have a JPY bank account, such as an HSBC Multi-Currency Account, you can select JPY as the deposit currency and choose International Bank Transfer.
Before making the transfer, check with your bank regarding any applicable international transfer fees.
With this method, you only need to convert your MYR into JPY before transferring the money to IBKR. This can make the process simpler if your goal is specifically to invest in Japanese stocks. Hence, it is more suitable for beginners as the foreign currency risk is lower.
Please note that Wise does not allow us to fund the account in JPY. Check the available options displayed in your IBKR account before making a transfer.
Enter your bank information and initiate the transfer from your bank account.
Once the transfer has been processed, the funds should appear in your IBKR account. The processing time depends on your bank.
Funding in non JPY (more convenient but higher foreign currency risk)
Another option is to fund your IBKR account in another supported currency and convert it to JPY later.
Select the currency you want to deposit and choose “Transfer from Wise Balance.” In this example, I am using MYR.
As mentioned above, IBKR does not allow us to transfer JPY directly from Wise. Hence, we will need to convert MYR to acceptable currencies, such as USD or SGD, then convert to JPY.
The acceptable currencies are as follow: AUD/ CHF/ EUR/ GBP/ HUF/ NZD/ SGD/ USD
Select “MYR”, then “Next”.
Enter the Total Transfer Amount in MYR.
Under “Total to Recipient,” select the currency you want to convert your MYR into. In this example, I selected USD because I also invest in U.S. stocks.
The amount that the recipient will receive will be calculated automatically. Check the applicable charges and the final amount before proceeding.
Click “Continue” and then “Confirm.”
Once the funds are reflected in your IBKR account, go to “Trade” → “Convert Currency.”
IBKR can also automatically convert your currency when you place a trade. However, I prefer to convert my funds manually before placing an order so that I can see the exchange transaction separately. Moreover, manually converting is much cheaper. Auto conversion fee is 0.03% while manual conversion fee is around 0.01%.
Select the currency you currently hold, enter the amount you want to convert, and click “Submit.”
Step 2: Purchase Japanese Stock
Once your funds are reflected in your IBKR account, you can start trading!
You can check your cash holdings under Portfolio> Positions.
Base currency means the funded currency.
Look up the Japanese Stock in the search bar.
Click “Buy.”
If you have not converted your funds into JPY, IBKR may automatically convert the required amount when executing your trade, depending on your account settings and available currency balances.
The fee for auto conversion will cost more, thus I recommend manually converting it first, then submit a trade order.
Enter the Quantity and Limit Price.
For standard Japanese stocks traded on the Tokyo Stock Exchange, orders are generally placed in board lots of 100 shares.
Once you enter the limit price, IBKR will display the estimated total value of the trade.
For beginners, I prefer using a Limit Order because you can specify the maximum price you are willing to pay.
You will also need to select your Time-in-Force (TIF):
- Day — The order remains active for the trading day. If it is not executed by the end of the day, it will be cancelled.
- Good-Till-Cancelled (GTC) — The order remains active until it is executed or cancelled, subject to IBKR’s applicable order-duration rules.
- Other order-duration options may be available depending on the market and order type.
Once everything looks correct, click “Buy Order” to submit your order.
Leave a Reply