Japan IPOs: Why Lower Flip Profits Signal Better Quality

Japan’s initial public offerings have become less profitable to flip on their trading debut, a trend investors have welcomed as an indication of higher quality companies coming to market. IPO buyers received a median return of 26.3% in 2025 if they sold at the opening price, the lowest profit since 2012, according to Bloomberg-compiled data. That underscores better IPO pricing in Japan, according to Takashi Kaneko, professor emeritus at Keio University who studies stock market listings. The Tokyo Stock Exchange’s plans to push for stronger growth in the startup market section resulted in fewer small-sized initial share sales, transactions that are often priced at a deeper discount than other first-time offerings.