E*Trade Sets Up Shop in Japan

Online broker E*Trade (Nasdaq: EGRP) and Japanese joint-venture partner Softbank announced the launch of E*Trade Japan today. The launch coincides with today’s deregulation of Japanese trading commission rates, which will enable brokers to determine commissions for securities trades.

E*Trade Japan has already acquired Japanese brokerage Osawa Securities, which will provide an established customer service infrastructure.

“The introduction of E*TRADE-branded online investing in Japan is a significant step in both our global expansion strategy and our ultimate goal of establishing the world’s first global, cross-border trading network,” said Judy Balint, president and chief operating officer of E*Trade International.

In addition to providing online trading, E*Trade Japan will offer financial content including news and stock quotes from Reuters. Also available will be mutual fund reports from Morningstar Japan and company reports from Toyo Keizai, a leading Japanese corporate information resource. In addition, the site will feature a proprietary mutual fund search engine.

Japan Offers Large Market

According to Nikkei Netbusiness, Japan’s Internet market consists of more than 18 million users — making it the world’s second-largest market behind only the United States. Softbank says that it expects the Japanese Internet market to grow to more than 40 million users by 2003.

What’s more, according to the Economic Planning Agency of Japan, just 11 percent of financial assets held by Japanese households are invested in stocks and mutual funds. By contrast, the number for U.S. households is 38 percent, according to the U.S. Federal Reserve Board. E*Trade Japan believes that the abolition of Japan’s securities transaction tax in 2001 will lead to a greater level of investment by Japanese households.

“We expect to make substantial progress in the market during this time of expanding consumer demand for reasonably priced, highly accessible investment services,” said E*TRADE Japan CEO and Softbank executive vice president Yoshitaka Kitao

Focused On International Expansion

E*Trade Japan is the fourth E*Trade site this year and the sixth E*Trade site overall to be launched outside of the United States. E*Trade U.K. launched in July, E*Trade Sweden launched in June, and CPR-E*Trade launched in France in March.

E*Trade Australia, which also serves New Zealand, launched in 1998, and E*Trade Canada launched in 1997. E*Trade says it plans to expand its global presence by launching sites in the top 20 financial markets in the world.