TOKYO REPORT: Stock Splits by Listed Japanese Firms Up for 4 Years in Row

Tokyo, July 13 (Jiji Press)–Publicly traded companies in Japan are increasingly carrying out stock splits in an effort to lower the minimum investment amount required to buy their shares. According to the Tokyo Stock Exchange, 272 listed companies decided to conduct stock splits in fiscal 2025, up 28 pct from the previous year for the fourth consecutive year of increase. The trend appears to reflect efforts by companies to make their shares more affordable for individual investors with limited funds, even as the stock market continues to go up. Spurred by Higher Equity Prices In a two-for-one stock split, for instance, the price of a share valued at 1,000 yen would theoretically fall to 500 yen, while the number of outstanding shares would double. Stock splits are “expected to help attract new investors” without impairing the value of assets owned by existing shareholders, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co. In fiscal 2025, which ended in March 2026, companies that carried out stock splits included Nitori Holdings Co., Aeon Co. and IHI Corp. The increase in stock splits has been driven partly by the sharp rise in stock prices. At the end of March 2026, the benchmark Nikkei average of 225 selected issues listed on the TSE’s top-tier Prime section stood at 51,063.72, up 15,446.16 points, or 43.37 pct, from a year earlier. Listed companies have also been responding to the TSE’s call for them to keep the minimum trading amount of their shares below 500,000 yen. At the same time, more listed companies are unwinding cross-shareholdings with business partners as part of an effort to improve corporate governance. The trend has prompted many businesses to place greater emphasis on individual investors. “Individual investors who become fans of a company and hold its shares over the long term are expected to help absorb such shares,” Chizuru Morishita, a researcher at NLI Research Institute, said. In a TSE survey of individual investors conducted from November 2025 to January 2026, the most popular choice of the preferred minimum investment amount was around 100,000 yen. “More companies may have taken such results into account and made strategic decisions to carry out stock splits,” Morishita said. Falling behind Still, the reality is that stock split initiatives by listed companies have not kept pace with the run-up in stock prices. The median minimum investment amount for stocks listed on the TSE stood at 141,400 yen at the end of March 2026, up about 10,000 yen from a year earlier. The increase left a persistent gap between actual investment thresholds and the levels sought by individual investors. Even when high-profile companies popular with investors conduct stock splits, the impact can quickly fade if stock prices continue to climb. Japanese stock exchanges require shares to be traded in units of 100. As a result, Ichikawa said, “minimum investment amounts tend to become large, and quite a few stocks remain unaffordable for individual investors.” In addition, the annual investment limit for the growth investment quota, the main component, of the Nippon Individual Savings Account, or NISA, Japan’s tax-exempt investment program for retail investors, is set at 2.4 million yen. As a result, if a stock’s price exceeds 24,000 yen, retail investors cannot buy even one trading unit within that quota. Individual investors in Japan continue to call for a market environment in which they can invest in increments of tens of thousands of yen. Many point to the United States, where investors can start by buying a single share, as a model. According to a TSE survey, the minimum investment amount for the constituent stocks of S&P 500, a key U.S. market index, was equivalent to 21,657 yen, on the basis of exchange rates at the end of March 2026. At the same time, some market participants warn that lowering minimum investment amounts could sharply increase the number of shareholders, adding to companies’ administrative burdens, including costs associated with general shareholders’ meetings. Morishita said that before reviewing trading units, Japan must first take steps to reduce shareholder administration burdens, including work related to convocation notices for general shareholders’ meetings and dividend-related documents. “Rather than leaping ahead in the discussion, we should first move forward with measures that can realistically be taken,” she said. END [Copyright The Jiji Press, Ltd.]