Last year, Japan amended its investment trust regulation to allow for ETFs. However, they are only allowed to track Japanese indices, such as the Nikkei or TOPEX, said Shunzo Kayanuma, general manager of the Tokyo Stock Exchange.
"This year, our government is flexible enough to expand that and allow us to trade ETFs [based] on other indices," Kayanuma said.
The TSE is planning on trading an ETF based on the Nasdaq this summer.
"This is a significant development for both Nasdaq and investors in Japan," said John Jacobs, CEO of Nasdaq Financial Products Services, Inc. "Investors in Japan will be introduced to an ETF whose trading symbol is QQQ the most heavily-traded security in the U.S. Not only will the Nasdaq Japan Market continue to provide opportunities to invest in Japan's growth companies, but also in many of the largest and most dynamic businesses in the world."