TOKYO -- If you didn't read


last week, you may have missed out on Wednesday's market debut of



, the Japanese email and Web-hosting company that jumped 414.2% on its first day of



(The company's shares were to have made their debut on the

Tokyo Stock Exchange's Mothers

board Friday, but an overabundance of sellers trying to cash in on U.S. investors' enthusiasm created an imbalance that halted trading.)

Finding even basic information on Japanese companies is a tiresome process unless a




terminal sits on your desk. U.S. newspapers, more concerned with the moiling of the Nasdaq and

New York Stock Exchange

, barely look at stocks overseas.

And that's a pity: While the


is up just 2.9% over the last 12 months, the benchmark


index is up 33%. Just think what that has done for the average Japan-region mutual fund, up 85%, according to



More importantly to U.S. investors, many companies that trade in Tokyo, like


(SNE) - Get Report


Bank of Tokyo-Mitsubishi


, also trade on U.S. exchanges. And if you want to buy shares in Japanese stocks that don't trade in the U.S., most brokers will help you.

It's important to keep an eye on the Japanese market. So if you want to figure out trading rules (like the cumbersome limit rule), listing requirements and upcoming initial public offerings, where do you turn? What is the difference between the TSE's first and second sections? What does it mean when a Japanese stock goes limit-up?

We'll try to answer those questions and a few others with this primer on trading across the Pacific puddle.

TSE Basic Structure

The TSE, Japan's biggest and most powerful stock exchange, is divided into two main boards, which list a combined 2,000 companies. The first section is where the biggest Japanese companies, the household brand names known around the world, are listed.

Listing requirements for the first section are stringent. To be eligible, firms need to have a float of more than 20 million shares in order to ensure liquidity; it must also post profits of at least 400 million yen ($3.76 million) the year prior to listing, and at least 100 million yen ($941,400) the year before that. Any company that can't cut the mustard will be bumped down to the second section, where some of Japan's large, but lesser known companies, trade.

Fund managers looking for high-risk, high-return investments go shopping in the

over-the-counter market

, run by the

Japan Securities Dealers Association

. More than 800 companies trade on the OTC, but the market faces stiff competition from two new high-growth and technology-oriented bourses. Last year, the TSE set up its high-growth Mothers board, where four firms (including Crayfish) currently trade. Later this year,

Nasdaq Japan

will kick into action, and both bourses are hoping to see at least 100 firms list over the course of the year.


The key index investors have historically looked at is the

Nikkei 225

. It's maintained by Japan's premier financial daily, the

Nihon Keizai Shimbun

. The


index, which is composed of all stocks listed on the TSE's first section, has grown increasingly popular over the past decade, particularly as Japan's economy diversified. The index includes some blue-chips, as well as large tech shares, so many investors feel the Topix represents the Tokyo market much better than the Nikkei 225.



small-cap index highlights the companies that trade in the OTC market. The Nikkei newspaper also runs its own index for OTC shares called the

Nikkei OTC


There are countless other indices compiled by private companies such as

Morgan Stanley Capital International


Nomura Securities


Standard & Poor's


Here are some Web sites that offer exchange information and the makeup of indices (all are English sites, unless otherwise noted):

Market and Corporate Information

Though Japan is the world's second-largest economy, financial information, particularly in English, is hard to come by. While the Internet has the potential to change that, Japanese companies haven't had the incentive to publish English-language materials to satiate foreign appetites.

The cream of the crop for information sources is the fee-based

Nikkei Net

, an English-language Web site run by the

Nihon Keizai Shimbun

. The database is perhaps the best available, and it provides the latest corporate and market news, as well as Japanese stock quotes on a 20-minute delay.

For information on IPOs, check out

Tokyo IPO

, a new Web site that has a schedule of upcoming offerings, financial information on new issues and some witty commentary that sums everything up in a few paragraphs.

Getting stock quotes in English is more difficult. Unless you know the four-digit stock code, trying to find a company's share price is a cumbersome task. One way to do it is to look up the stock code on the TSE page, then plug it into one of the databases. The best is

Yahoo! Japan's

finance section, but again, it's only in Japanese.

While these Web sites don't stack up favorably against the wealth of information available about U.S. stocks, they'll at least give you a start in figuring out which firm will be the next Crayfish.