Misplaced Pages

#887112

46-571: The exchange is owned by Japan Exchange Group (JPX), a holding company that it also lists ( TYO : 8697 ), and operated by Tokyo Stock Exchange, Inc., a wholly owned subsidiary of JPX. JPX was formed from merger of Tokyo Stock Exchange Group, Inc. with Osaka Securities Exchange Co., Ltd. (now Osaka Exchange, Inc. ); the merger process began in July 2012, when said merger was approved by the Japan Fair Trade Commission . JPX itself

92-640: A central bank , such as the US Federal Reserve bank , and raising additional capital. In a worst-case scenario, depositors may demand their funds when the bank is unable to generate adequate cash without incurring substantial financial losses. In severe cases, this may result in a bank run . Banks can generally maintain as much liquidity as desired because bank deposits are insured by governments in most developed countries. A lack of liquidity can be remedied by raising deposit rates and effectively marketing deposit products. However, an important measure of

138-465: A central clearing counterparty , Japan Securities Clearing Corporation (JSSC). As of June 2021, JPX is the world's fifth-largest stock exchange operator, behind NYSE , NASDAQ , SSE , and HKSE . The roots of JPX trace back to November 22, 2011, when TSE and OSE decided to merge into one, as a solution to slowing market conditions in Japan. The merger was subsequently approved on July 5, 2012 when

184-459: A bank's value and success is the cost of liquidity. A bank can attract significant liquid funds. Lower costs generate stronger profits, more stability, and more confidence among depositors, investors, and regulators. The market liquidity of stock depends on whether it is listed on an exchange and the level of buyer interest. The bid/ask spread is one indicator of a stock's liquidity. For liquid stocks, such as Microsoft or General Electric ,

230-411: A daily process requiring bankers to monitor and project cash flows to ensure adequate liquidity is maintained. Maintaining a balance between short-term assets and short-term liabilities is critical. For an individual bank, clients' deposits are its primary liabilities (in the sense that the bank is meant to give back all client deposits on demand), whereas reserves and loans are its primary assets (in

276-489: A liquid market, the trade-off is mild: one can sell quickly without having to accept a significantly lower price. In a relatively illiquid market, an asset must be discounted in order to sell quickly. A liquid asset is an asset which can be converted into cash within a relatively short period of time, or cash itself, which can be considered the most liquid asset because it can be exchanged for goods and services instantly at face value. A liquid asset has some or all of

322-534: A new stock market index , the JPX Prime 150 Index  [ ja ] , to track the performance of the Japanese blue chips . Subsequently, on March 18, 2024, Nomura Asset Management listed an exchange-traded fund (ETF) for the index on TSE, the same day that index futures contract was launched on OSE. The JPX has been led by a President & CEO (combined in one role) since its formation in 2013. JPX

368-581: A new subsidiary, JPX Market Innovation & Research, Inc. (JPXI), which would provide financial market data and price index services and system-related services to financial data vendors . On April 1, 2022, in order to strengthen business activities in the Kansai region , JPX established Osaka Head Office and Osaka IPO Center in the Osaka Securities Exchange Building at Kitahama , Osaka. The Osaka site would take over

414-474: A particular market price. Market makers seek to profit by charging for the immediacy of execution: either implicitly by earning a bid/ask spread or explicitly by charging execution commissions. By doing this, they provide the capital needed to facilitate the liquidity. The risk of illiquidity does not apply only to individual investments: whole portfolios are subject to market risk. Financial institutions and asset managers that oversee portfolios are subject to what

460-489: A second connection after it had already connected. Even though brokerages have access to alternative gateways, the outage caused "delays in execution, correction and cancellation" for many securities firms including Daiwa Securities and Nomura. On October 1, 2020, for the first time in its history as an all electronic exchange, the Tokyo Stock Exchange had to suspend trading in all shares for a whole day due to

506-461: A technical glitch, causing buying and selling to freeze. This was announced just minutes before 9 a.m., when it was scheduled to open. The problem was found to be in "the system for relaying market information", hence making the glitch a network problem, but the Asahi Shimbun reported that the glitch was due to a mechanical failure. The issue stemmed back to the "Arrowhead" trading system and

SECTION 10

#1732776490888

552-489: A trader at UBS Warburg , the Swiss investment bank, sold 610,000 shares in this company at ¥6 each, while he intended to sell 16 shares at ¥600,000. The bank lost £71 million. During yet another initial public offering, that of J-Com, on December 8, 2005, an employee at Mizuho Securities Co., Ltd. mistakenly typed an order to sell 600,000 shares at ¥1 each, instead of an order to sell 1 share at ¥600,000. Mizuho failed to catch

598-462: Is a corporate group formed by the holding company, Japan Exchange Group, Inc., and its subsidiaries: Market liquidity In business , economics or investment , market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the price at which an asset can be sold, and how quickly it can be sold. In

644-655: Is a " financial instruments exchange holding company " subject to the regulations of the Financial Instruments and Exchange Act enforced by the Financial Services Agency . It is also monitored by a separate self-regulatory body called Japan Exchange Regulation (JPX-R), dedicated to ensuring neutral and effective self-regulation operations defined under the Financial Instruments and Exchange Act. The exchange group

690-420: Is called "structural" and "contingent" liquidity risk . Structural liquidity risk, sometimes called funding liquidity risk, is the risk associated with funding asset portfolios in the normal course of business . Contingent liquidity risk is the risk associated with finding additional funds or replacing maturing liabilities under potential, future-stressed market conditions. When a central bank tries to influence

736-751: The Nihon Keizai Shimbun (Japan's largest business newspaper), the TOPIX index based on the share prices of Prime companies, and the J30 index of large industrial companies maintained by Japan's major broadsheet newspapers. There are also active bond market and futures market . Ninety-four domestic and 10 foreign securities companies participate in TSE trading. See: Members of the Tokyo Stock Exchange The exchange's press club, called

782-602: The First Section which started when Tokyo Stock Exchange was re-established in 1949 and includes mainly large companies; the Second Section which started in 1961 and includes mainly mid-sized companies; JASDAQ (established in 1991, acquired by Osaka Stock Exchange in 2010, and absorbed into TSE in 2013) and Mothers (Market of the high-growth and emerging stocks, established at TSE in 1999) which are both for emerging companies; and TOKYO PRO Market which

828-456: The Japan Fair Trade Commission approved the TSE-OSE merger, paving the way for the formation of JPX. On January 1, 2013, JPX was launched. The remainder of the merger was realized through a series of changes: In December 2014, JPX concluded a Letter of Interest (LOI) with Singapore Exchange . In the same month, JPX signed a joint venture agreement with Daiwa Institute of Research Ltd.,

874-460: The subprime mortgage crisis are examples of illiquid assets, as their value was not readily determinable despite being secured by real property. Before the crisis, they had moderate liquidity because it was believed that their value was generally known. Speculators and market makers are key contributors to the liquidity of a market or asset. Speculators are individuals or institutions that seek to profit from anticipated increases or decreases in

920-599: The Growth subsection were transitioned into the Growth market, along with all 424 companies in the Mothers section. There were a total of 3,899 companies listed in Tokyo Stock Exchange, as of 21 August 2023. The Tokyo Stock Exchange was established on May 15, 1878, as the Tokyo Kabushiki Torihikijo ( 東京株式取引所 , also literally means the Tokyo Stock Exchange and shortened as Tōkabu ( 東株 ) ) under

966-652: The Kabuto Club ( 兜倶楽部 , Kabuto kurabu ) , meets on the third floor of the TSE building. Most Kabuto Club members are affiliated with the Nihon Keizai Shimbun , Kyodo News , Jiji Press , or business television broadcasters such as Bloomberg LP and CNBC . The Kabuto Club is generally busiest during April and May, when public companies release their annual accounts. The exchange's normal trading sessions are from 9:00 a.m. to 11:30 a.m. and from 12:30 p.m. to 3:00 p.m. on all days of

SECTION 20

#1732776490888

1012-575: The TSE paid $ 303 million to acquire a 4.99% stake in Singapore Exchange Ltd. The London Stock Exchange (LSE) and the TSE are developing jointly traded products and share technology, marking the latest cross-border deal among bourses as international competition heats up. In July 2008, the LSE and the TSE announced a new joint venture Tokyo-based market, which will be based on the LSE's Alternative Investment Market (AIM). The exchange

1058-412: The close on January 18 due to the trade volume threatening to exceed the exchange's computer system's capacity of 4.5 million trades per day. This was called the "livedoor shock". The exchange quickly increased its order capacity to five million trades a day. On October 9, 2018, one of the four gateways used for order entry was taken down after Merrill Lynch Japan Securities erroneously tried to establish

1104-505: The direction of then- Finance Minister Ōkuma Shigenobu and capitalist advocate Shibusawa Eiichi . Trading began on June 1, 1878. In 1943, the exchange was combined with eleven other stock exchanges in major Japanese cities to form a single Japanese Stock Exchange ( 日本証券取引所 , Nippon Shōken Torihikisho ) . The combined exchange was shut down on August 1, days before the bombing of Hiroshima . The Tokyo Stock Exchange reopened under its current Japanese name on May 16, 1949, pursuant to

1150-546: The entire operations of JPX in the event of a wide-ranging disaster in the National Capital Region . TSE and OSE transferred and integrated their data and digital businesses into JPXI. TSE also merged its IT services arm, Tosho System Service Co., Ltd. (TSS), into JPXI, which would inherit the rights and obligations of all business carried out by TSS, such as system development, operations, consulting, and telecommunication services. In July 2023, JPX launched

1196-429: The error; the Tokyo Stock Exchange initially blocked attempts to cancel the order, resulting in a net loss of US$ 347 million to be shared between the exchange and Mizuho. Both companies are now trying to deal with their troubles: lack of error checking, lack of safeguards, lack of reliability, lack of transparency, lack of testing, loss of confidence, and loss of profits. On 11 December, the TSE acknowledged that its system

1242-423: The following features: it can be sold rapidly, with minimal loss of value, anytime within market hours. The essential characteristic of a liquid market is that there are always ready and willing buyers and sellers. It is similar to, but distinct from, market depth , which relates to the trade-off between quantity being sold and the price it can be sold for, rather than the liquidity trade-off between speed of sale and

1288-409: The higher its price and the lower is its expected return. In addition, risk-averse investors require higher expected return if the asset's market-liquidity risk is greater. This risk involves the exposure of the asset return to shocks in overall market liquidity, the exposure of the asset's own liquidity to shocks in market liquidity and the effect of market return on the asset's own liquidity. Here too,

1334-507: The higher the liquidity risk, the higher the expected return on the asset or the lower is its price. One example of this is a comparison of assets with and without a liquid secondary market. The liquidity discount is the reduced promised yield or expected return for such assets, like the difference between newly issued U.S. Treasury bonds compared to off the run treasuries with the same term to maturity. Initial buyers know that other investors are less willing to buy off-the-run treasuries, so

1380-501: The inability to fail over to backup hardware. Other stock markets in Japan, including regional exchanges in Nagoya, Fukuoka and Sapporo, also suspended trading because they used the same technology platform as the TSE. Meanwhile, derivatives on the OSE continued trading, with Nikkei futures ending the day 0.56% higher. Japan Exchange Group Inc., which operates the Tokyo Stock Exchange, said that

1426-416: The liquidity ( supply ) of money, this process is known as open market operations . The market liquidity of assets affects their prices and expected returns. Theory and empirical evidence suggest that investors require higher return on assets with lower market liquidity to compensate them for the higher cost of trading these assets. That is, for an asset with given cash flow, the higher its market liquidity,

Tokyo Stock Exchange - Misplaced Pages Continue

1472-432: The new Securities Exchange Act. The TSE runup from 1983 to 1990 was unprecedented, in 1990 it accounted for over 60% of the world's stock market capitalization (by far the world's largest) before falling precipitously in value and rank one of the 4th largest exchange in the world by market capitalization of listed shares. The current TSE building was opened on May 23, 1988, replacing the original TSE building from 1931, and

1518-402: The newly issued bonds have a higher price (and hence lower yield). In the futures markets , there is no assurance that a liquid market may exist for offsetting a commodity contract at all times. Some future contracts and specific delivery months tend to have increasingly more trading activity and have higher liquidity than others. The most useful indicators of liquidity for these contracts are

1564-416: The price it can be sold for. A market may be considered both deep and liquid if there are ready and willing buyers and sellers in large quantities. An illiquid asset is an asset which is not readily salable (without a drastic price reduction, and sometimes not at any price) due to uncertainty about its value or the lack of a market in which it is regularly traded. The mortgage-related assets which resulted in

1610-537: The research arm of Daiwa Securities Group , and Myanma Economic Bank to establish Yangon Stock Exchange . In May 2015, TSE and OSE opened a joint branch office in Singapore . On October 1, 2019, JPX acquired Tokyo Commodity Exchange, Inc. (TOCOM), to expand its derivatives trading business in the commodity market . In turn, TOCOM became a wholly owned subsidiary of the Group. On November 25, 2021, JPX launched

1656-639: The results were published on January 11, 2022. From the First Section, 1841 companies were transitioned into the Prime market and 344 companies were transitioned into the Standard market. All 474 companies in the Second Section were also transitioned into the Standard market. From JASDAQ , all 658 companies in its Standard subsection were transitioned into the Standard market and all 36 companies in

1702-409: The sense that these loans are owed to the bank, not by the bank). The investment portfolio represents a smaller portion of assets, and serves as the primary source of liquidity. Investment securities can be liquidated to satisfy deposit withdrawals and increased loan demand. Banks have several additional options for generating liquidity, such as selling loans, borrowing from other banks , borrowing from

1748-461: The suspension would be indefinite until the problem was resolved. Normal trading was resumed the following day. Japan Exchange Group Japan Exchange Group, Inc. ( 株式会社日本取引所グループ , Kabushiki-gaisha Nippon Torihikijo Gurūpu , Corporate Number : 9120001098575) , abbreviated as JPX or Nippon Torihikijo , is a Japanese financial services company headquartered in Tokyo and Osaka . It

1794-525: The trading floor of the TSE was closed on April 30, 1999, so that the exchange could switch to electronic trading for all transactions. A new facility, called TSE Arrows ( 東証アローズ , Tōshō Arrows ) , opened on May 9, 2000. In 2010, the TSE launched its Arrowhead trading facility. In 2001, the TSE restructured itself as a kabushiki gaisha ("stock company"): before this time, it was structured as an incorporated association ( 社団法人 , shadan hōjin ) with its members as shareholders. On 15 June 2007,

1840-399: The trading volume and open interest . There is also dark liquidity , referring to transactions that occur off-exchange and are therefore not visible to investors until after the transaction is complete. It does not contribute to public price discovery . In banking, liquidity is the ability to meet obligations when they come due without incurring unacceptable losses. Managing liquidity is

1886-681: The week except Saturdays, Sundays and holidays declared by the Exchange in advance. The exchange is closed for the following holidays: New Year's Day , Coming of Age Day , National Foundation Day , Vernal Equinox Day , Shōwa Day , Constitution Memorial Day , Greenery Day , Children's Day , Marine Day , Respect for the Aged Day , Autumnal Equinox , Health and Sports Day , Culture Day , Labour Thanksgiving Day , and The Emperor's Birthday . Until April 4, 2022, corporate shares are listed and traded at Tokyo Stock Exchange in five market sections:

Tokyo Stock Exchange - Misplaced Pages Continue

1932-520: Was at fault in the Mizuho trade. On 21 December, Takuo Tsurushima, chief executive of the TSE, and two other senior executives resigned over the Mizuho affair. On January 17, 2006, the Nikkei 225 fell 2.8%, its fastest drop in nine months, as investors sold stocks across the board in the wake of a raid by prosecutors on internet company livedoor . The Tokyo Stock Exchange suspended trading 20 minutes before

1978-597: Was established in 2009 jointly with London Stock Exchange as an Alternative Investment Market (Tokyo AIM) for small companies. There were a total of 3,821 companies listed in Tokyo Stock Exchange, as of March 31, 2022. companies) (本則市場) Beginning April 4, 2022, the market divisions were restructured into the Prime , Standard and Growth market divisions, differentiated by market liquidity , corporate governance , and other criteria. Companies voluntarily selected their new division between September and December 2021, and

2024-770: Was formed by the merger of Tokyo Stock Exchange Group, Inc.  [ ja ] and Osaka Securities Exchange Co., Ltd. on January 1, 2013. As a result of this merger and market reorganization, the Tokyo Stock Exchange (TSE) became the sole securities exchange of JPX and the Osaka Exchange (OSE) became the largest derivatives exchange of JPX. JPX owns three licensed "financial instruments exchange" corporations: Tokyo Stock Exchange, Inc. , Osaka Exchange, Inc. , and Tokyo Commodity Exchange, Inc. (TOCOM). It also has an IT services and research arm, JPX Market Innovation & Research, Inc. (JPXI), and

2070-517: Was launched on January 1, 2013. The TSE is incorporated as a kabushiki gaisha ( joint-stock company ) with nine directors, four auditors and eight executive officers. Its headquarters are located at 2-1 Nihonbashi - Kabutochō , Chūō , Tokyo which is the largest financial district in Japan . The main indices tracking the stock market of TSE are the Nikkei 225 index of companies selected by

2116-490: Was only able to operate for 90 minutes on November 1, 2005, due to bugs with a newly installed transactions system, developed by Fujitsu , which was supposed to help cope with higher trading volumes. The interruption in trading was the worst in the history of the exchange until October 1, 2020. Trading was suspended for four-and-a-half hours. During the initial public offering of advertising giant Dentsu , in December 2001,

#887112