What the Rule Translates

Twenty-two of the twenty-four companies whose disclosure we checked by hand publish their earnings summary in English. Three publish their annual securities report in English in full, and four publish part of it. Both counts run on a denominator of twenty-four, and where a company publishes no Japanese version of a document at all we drop it from that document's denominator. The annual securities report is the one the Financial Instruments and Exchange Act describes as setting out the company's trade name, the state of the corporate group to which it belongs, the state of its accounts, and other important matters concerning the content of its business. All figures here are as of 29 July 2026 unless dated otherwise.

The Tokyo Stock Exchange published the rule change on 9 May 2024. The operative sentence is Article 436-4(1) of the listing rules: Prime Market listed domestic companies shall, with respect to earnings information and timely disclosure information, provide disclosure in English at the same time as disclosure in Japanese. Three things are fixed by that sentence. Who: Prime Market listed domestic companies. What: earnings information and timely disclosure information. When: simultaneously. The rules took effect on 1 April 2025, with a deferral attached to the obligation itself — an issuer already listed on Prime before that date which filed the exchange's prescribed form stating when it would begin English disclosure came under the obligation from 1 April 2026 instead, whatever date the form named.

The paragraph immediately after it lowers the bar. Article 436-4(2) provides that for the English disclosure, disclosing a part or a summary of the content of the Japanese disclosure is sufficient. The exchange's own FAQ works the example: a company that publishes only the summary page of its earnings release in English is not in breach. In the consultation, the exchange offered a second example — for timely disclosure, enough for an overseas investor to grasp what was decided and when, with the detail to follow later, or with a pointer to the Japanese.

The two covered categories are wider than they sound. Earnings information means the annual and quarterly earnings summaries, and, where a company prepares supplementary explanatory material for investors, that material too — though the exchange then says the supplementary material need not be translated if the summary itself is. Timely disclosure information means everything a company files through TDnet other than earnings: decided facts, occurred facts, revisions to forecasts and dividends, subsidiary matters, plus a list of smaller items that the exchange has since extended. Voluntary TDnet filings are covered as well.

Everything outside those two categories was handled separately, and more gently. Article 445-8, in the corporate behaviour code, asks Prime Market listed domestic companies to endeavour, as far as possible, to disclose in English at the same time and with the same content whenever they disclose in Japanese. That one carries no deferral, and the provision as drafted sets no threshold. The Corporate Governance Code adds an English-disclosure principle for the Prime and Standard markets on a comply-or-explain basis: a company that does not implement it must explain why.

Someone did ask. In the consultation whose responses the exchange published on 9 May 2024 — comments were taken between 26 February and 27 March that year — an overseas asset manager, Legal & General Investment Management, proposed extending the obligation to the annual securities report and the corporate governance report, on the grounds that the latter carries board composition, cross-shareholdings, and the rest of what a dialogue with a company needs. The exchange's published answer does not say those documents are excluded. It says the practical burden on listed companies has to be weighed, and that the obligation was set on information with large impact on investment decisions where speed is required. The two documents fall outside that description rather than being named.

The statute that governs the annual securities report imposes no English duty of its own. Article 24(1) of the Financial Instruments and Exchange Act, in the version in force from 23 July 2026, requires a domestic company to file the report with the Prime Minister within three months of its fiscal year end, and says nothing about language: a scan of all fifteen paragraphs of Article 24 turns up no occurrence of Japanese, of national language, or of English. A machine sweep of the whole statute finds English in four places, all of them permissions for foreign issuers to file in English instead of Japanese, all of them ending in may. The only translation duty runs the other way — a foreign issuer's English filing must carry a Japanese summary translation of the items the Cabinet Office ordinance specifies. The Financial Services Agency states the position in a footnote: translating the annual securities report is not a duty under the Act, and is done at the filer's option.

So we measured what happens at the edge. Our population is every filer of an annual securities report — EDINET document type 120 — in the trailing 400 days that carries a securities code, keeping the most recent filing where a company appeared twice. For each we pulled the XBRL in CSV form and read the shareholder-composition tags, computing foreign institutions plus foreign individuals over the total, in trading units. We ran 3,189 companies. For every company where the seven category unit counts could be read, they summed exactly to the total the filing itself reports — 3,167 companies, and those 3,167 are the population. The remaining 22 yielded no usable breakdown and were dropped rather than repaired. The filings come from EDINET, run by the Financial Services Agency, and are used under the Public Data License 1.0.

Median foreign ownership across the 3,167 is 7.31% on a unit basis; the mean is 12.53%, which is the usual signature of a distribution with a long right tail. Market segment comes from the listing-venue tag in the same filing, not from inference: Prime 1,407 companies at a 17.97% median, Standard 1,272 at 2.63%, Growth 401 at 3.93%, and 87 elsewhere at 0.26%. Those are our counts of filings, not a listing roster. The exchange's own tally on 28 July 2026 was 1,552 companies on Prime and 3,898 in total across its four markets, a count that excludes Nagoya, Fukuoka and Sapporo, and our set covers only companies whose latest annual filing was available on 29 July — so the difference is coverage and filing timing rather than a dispute over the counts.

Our count of the same filings puts 364 companies above 30% foreign ownership as of 29 July 2026 — 306 on Prime, 40 on Standard, 13 on Growth and 5 elsewhere — and 64 above 50%, all on the same unit basis. The rule's subject line, Prime and domestic, captures most but not all of the population where the question of language arises at all.

The aggregate is at a record. The four Japanese exchanges reported on 2 July 2026 that foreign entities held 28.3% of listed shares on a unit basis at the 2025 fiscal year end, up 1.7 points and past the previous high of 28.0% set in fiscal 2014. On a market-value basis the figure is 34.7%, up 2.3 points, also a record — but there the previous high was fiscal 2024, not 2014. The exchanges use different words for the two bases on purpose: shareholding ratio by owner for units, holding ratio by investor sector for value. A citation that mixes them is off by 6.4 points.

The value figure carries the usual caution. Foreign entities held ¥420.6 trillion of Japanese shares at that date, against ¥1,213.9 trillion held by all sectors — US$2.57 trillion and US$7.41 trillion converted at ¥163.8 to the dollar, the rate on 24 July 2026, the conversion ours and not theirs. The exchanges attribute the rise in the amount held mainly to prices, note that TOPIX rose 31.6% over the year, and call the attribution an inference. A ratio whose denominator is market capitalisation moves when the market moves.

Flow is more lopsided than stock. In 2025 — the survey year runs 6 January to 30 December, being a sum of weekly counts — overseas investors accounted for 64.9% of brokerage trading value across the Tokyo and Nagoya markets, and 66.2% on Tokyo Prime alone; in June 2026, covering 1 to 26 June, the two-market figure was 64.3%. The two are not the same sample: 50 participating firms in the annual figure, 51 in the June one. Overseas investor here means non-resident under Article 6(1)(vi) of the Foreign Exchange and Foreign Trade Act, so the Japanese branch of a foreign firm is generally counted as domestic. The survey covers exchange trading by participants with ¥3 billion or more in capital — about US$18.3 million at the same rate, again our conversion — and not off-exchange venues, and the exchange says so itself.

For the document-by-document check we took a sample of 24 companies from the population and went to each company's own website, one at a time, on 29 July 2026. We did not use any exchange list of English-disclosing companies. For each document type we recorded yes, partial, no, or not applicable, and where no Japanese version of a document exists we recorded na and removed the company from that document's denominator. The ownership figures for the sample come from the same EDINET filings as the population, not from the websites: median foreign ownership in the sample is 22.11%, against 7.31% in the population — the sample leans toward internationally held companies, which if anything should raise the translation rates below, not lower them.

Four of the six document types cluster. Earnings summary: 22 yes, 0 partial, 2 no, out of 24, so 91.7% in English in full. Results presentation: 21 of 23, 91.3%. Notice of the annual general meeting: 22 of 24, 91.7%. Integrated report: 18 of 20, 90.0%. The denominators differ because a company with no Japanese version of a document drops out of that document's count. Timely disclosure and IR news sits lower on the same measure: 18 yes, 4 partial, 2 no, out of 24, which is 75.0% in full and 91.7% if the partials are counted as yes.

The sixth comes back differently on either measure. Annual securities report: 3 yes, 4 partial, 17 no, out of 24 — 12.5% in full, 29.2% counting partials. One company in eight in this sample publishes the document in English; a further one in six publishes part of it. The other five types run from 75.0% to 91.7% in full and from 90.0% to 91.7% counting partials, on the same sample of 24 companies, checked on the same day, by the same method, with denominators of 24, 23 or 20 depending on the document.

The two companies without an English earnings summary are Okamoto Machine Tool Works, at 13.05% foreign ownership, and Maezawa Industries, at 8.8%. Both are Standard Market companies. The obligation's subject line names only Prime Market listed domestic companies; the exchange states the scope in the affirmative and does not spell out that Standard and Growth are excluded. Read on its subject, neither company falls inside it, and neither is doing anything the rule asks of them. They are in the sample because the sample was drawn from filers, not from the regulated set.

Three companies in the sample do publish the annual securities report in English: Seiko Epson, on Prime, at 22.6% foreign ownership; Bunka Shutter, on Prime, at 32.33%; and Sanden, on Standard, at 5.46%. They differ in size and in segment. Sanden is the informative one — a Standard Market company with single-digit foreign ownership, outside the obligation's subject line, publishing the document anyway. One case cannot identify what the binding constraint is, but it does show that the barrier is not universal: neither capability nor a foreign shareholder base is a precondition.

Among the companies in the sample whose annual securities report is not readable in English, the highest foreign ownership figures are Ichikoh Industries at 79.4%, Sumitomo Osaka Cement at 55.8%, Shimadzu at 42.41%, Sumitomo Electric Industries at 41.41%, Maxell at 37.03%, and NGK at 31.79%. All six publish an English earnings summary. We did not record market segment for these six, so we are not saying which of them the obligation names. The observation is consistent with the boundary of the obligation — the covered document in English, the uncovered one not — and one day of cross-sectional data cannot rule out cost, translation capacity, or an absence of requests.

The exchange's own annual survey, on a 31 December 2025 base, points the same way at full scale. English disclosure of the earnings summary reached 99.6% of Prime companies; disclosure of timely disclosure material other than the earnings summary reached 96.8%, up 37.6 points in one year, which is what a new obligation looks like in a time series. The annual securities report reached 27.5% of Prime companies, up 0.4 points, and 12.7% across all markets. Of the 1,598 Prime companies, 96 had applied for deferred application, and their obligation begins in April 2026.

The same survey contains a second number that the first tends to swallow. Among Prime companies, 57.9% translate the earnings summary in full. Nearly all of the remainder translate a part: 99.6% publish something in English, so 41.7 points of the total is excerpt or summary only, and 0.4% publish nothing. For the annual securities report the full-text figure is 10.4%. So the 99.6% is a count of Prime companies publishing some English version of the earnings summary, in full or in part, and the exchange is careful, in the FAQ, to describe that minimum as the point at which a company is not in breach rather than as a standard, adding that companies should keep considering how far their English disclosure goes.

The exchange says it will keep considering extension to the annual securities report, in coordination with the Financial Services Agency, taking account of company practice, investor feedback, and progress in machine translation. Until then the arrangement holds in the shape it was drawn. What the obligation covers is the announcement — the earnings summaries and the timely disclosure filings, what was decided and when — and a part or a summary of them in English is enough to satisfy it. What it does not reach is the document that explains the business at length, which is not available in full in English at seven of every eight companies we checked, and not available in English at all at seventeen of the twenty-four, including the one whose register is 79.4% foreign.