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Japan Exchange Group

The Tokyo-based financial services corporation

What is the Japan Exchange Group?

Japan Exchange Group is a Tokyo-based financial services corporation that operates different financial instruments exchange markets. It facilitates the trading of Japan’s financial securities under the country’s Financial Instruments and Exchange Act. It was established in 2013 following the merger between Tokyo Stock Exchange Group and Osaka Securities Exchange.

 

Japan Exchange Group

 

Japan Exchange Group is the largest stock exchange in Asia. It is also the world’s third largest stock exchange after NYSE Euronext and NASDAQ OMX Group. Joining the ranks of elite exchanges globally, Japan Exchange Group boasts a market capitalization of US$4.48 trillion.

 

Business Model of the Japan Exchange Group

Japan Exchange Group provides secure and fair market infrastructure and data, and clearing and settlement services, and conducts trading oversight. The corporation aims to provide convenience for all market users and ensure that the markets are reliable. In return, it receives fees from market users such as issuers, information vendors, and securities firms. Specifically, its main profit sources are from trading, listing, and clearing services.

 

Subsidiaries of the Japan Exchange Group

Tokyo Stock Exchange (TSE), Osaka Exchange (OSE), and Japan Exchange Regulation (JPX-R) are the three major subsidiaries of Japan Exchange Group. Both the Tokyo Stock Exchange and the Osaka Exchange provide market access to traders and investors. On the other hand, Japan Exchange Regulation operates as a self-regulatory body.

 

1. Tokyo Stock Exchange (TSE)

Tokyo Stock Exchange serves as the central equities marketplace of Japan, providing a large portion of the total liquidity of Japan Exchange Group. With more than 3,500 companies listed on the Tokyo Stock Exchange, almost 750 million trades are conducted every year.

It is composed of four separate entities:

  • 1st Section Market – where large-cap companies are listed
  • 2nd Section
  • Mothers (Market of High Growth and Emerging Stocks)
  • JASDAQ (Japan Securities Dealers Association)

 

2. Osaka Exchange (OSE)

Osaka Exchange is an exclusively digital marketplace, enabling market users to take part in the derivatives markets of Japan online. Volatility indexes, foreign and local equities indexes, as well as interest rate products, are some of the derivatives available on the OSE. The most commonly traded products on the Osaka Exchange are Tokyo Stock Price Index, Nikkei 225 mini, and Nikkei 225.

 

3. Japan Exchange Regulation (JPX-R)

As an independent, self-regulating body, Japan Exchange Regulation aims to uphold the integrity of the marketplace. It is in charge of overseeing trading operations on OSE and TSE.

 

Related Readings

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following resources will be helpful:

  • 2010 Flash Crash
  • NASDAQ Composite
  • New York Mercantile Exchange (NYMEX)
  • Trading Floor

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