The story of the Tokyo Stock Exchange, Inc (TSE) from the kimono to modern dress can be found in some detail on its unusually comprehensive corporate site. The exchange describes itself as a licensed financial instruments exchange.
It is engaged in the provision of market facilities for trading of securities, publication of stock prices and quotations, ensuring fair trading of securities and other financial instruments.
It operates and maintains First Section, Second Section, MOTHERS and JASDAQ. These are central to TSE markets. TSE is ranked third in the world and first in Asia by market capitalisation.
The former Tokyo Stock Exchange was the predecessor of the current Tokyo Stock Exchange. It was founded in May. 1878. In the early Meiji era, floor clerks worked in the traditional kimono.
The stock trading floor has attracted attention as a symbol of Japan's securities and financial markets of our country for more than 120 years since floor trading began at the former Tokyo Stock Exchange.
In March 1943, 11 exchanges across the country were merged into the Japan Securities Exchange with the former Tokyo Stock Exchange's stock incorporated into the controlled economy during wartime.
Because of WWII
Floor trading was suspended in August 1945 with what the TSE describes as aggravation of the war situation. After the war ended, the stock trading floor was occupied by the General Headquarters of the Allied Forces until January 1948.
The Japan Securities Exchange was dissolved in 1947 while a large number of shares were reallocated to public investors due to a break-up of very large Japanese Zaibatsu, or industrial conglomerates.
Owning stocks immediately became popular. Trading at the Tokyo Stock Exchange resumed in May, 1949. In the 1960s, the securities industry suffered heavily due to the slumping economy and sluggish trading.
A shift to licensing
In January 1968, the regulatory frameworks of securities companies were shifted to a licensing system.
GEKITAKU trading, group competitive call auction trading started in the middle of the era where stocks issued by Tokyo Stock Exchange were traded in December 1900 and continued until December 1982.
A boom in stocks started around 1985 when a new stock trading floor was opened. TSE computerised relevant operations at the stock trading floor, such as placing and matching orders, which had been done manually.
With the computerisation of operations, placing orders online became possible also for stocks traded in the stock trading floor if the order was a small lot. Accelerating computerization reduced the number of clerks on the trading floor.
The stock trading floor was closed on 30 April 1999. TSE arrows was opened on 9 May 2000. Japan Exchange Group (JPX) was established by Tokyo Stock Exchange and Osaka Securities Exchange on January 1, 2013.
JPX operates financial instruments exchange markets to provide market users with reliable venues for trading listed securities and derivatives instruments. JPX also provides clearing and settlement services through a central counterparty.
Tokyo Stock Exchange in brief
Founded (in modern form): 1 April 1949 (predecessor Tokyo Stock Exchange was founded on 15 May 1878 and trading began on 1 June)
Address: 2-1 Nihombashi Kabutocho, Chuo-ku Tokyo 103-8220 Japan
President & CEO: Koichiro Miyahara
Main indices: NIKKEI 225; JPX-Nikkei Index 400, Currency Hedged Index, JPX Nikkei Mid and Small Cap, TOPIX, JASDAQ, JASDAQ-Top 20, Tokyo Stock Exchange REIT Index, Tokyo Stock Exchange Composite Index, S&P JPX GIVI, S&P TOPIX150.
Opening hours: Trading hours of auction trading for stocks are divided into two sessions: 9:00am - 11:30am and 12:30pm - 3:00pm Monday to Friday
Market capitalisation: Y586.8 trillion as at 30 April 2017
Number of listed companies: 3,557
Biggest companies listed as of May 2017: Toyota Motor Corporation, NTT DOCOMO, Softbank Group, Mitsubishi UFJ Financial, KDDI Corporation
Serious fun facts: In early 1989, by market capitalisation, Japan accounted for 45% of the global stock market.
Fun fun fact: The Tokyo Stock Exchange has a dedicated section on TripAdvisor; the experience of visiting it scores 3.5 out of 5 on the site's rating system. Two reviewers describe it as excellent while one rates it terrible.
1878 Tokyo Stock Exchange Co, Ltd established.
1943 Japan Securities Exchange, a quasi-governmental organisation, created by a merger of all existing stock exchanges in Japan.
1947 Japan Securities Exchange dissolved.
1949 Tokyo Stock Exchange in its present form founded (opened on May 16)
1951 Margin transactions introduced.
1956 Bond trading started.
1961 Second Section for stocks opened.
1966 Government bonds listed for the first time after World War II.
1967 New auction process put into practice with abolition of "Baikai" trades (off-exchange trades by members reported as TSE contracts)
1968 Licensing system for securities companies introduced in place of registration system.
1969 TOPIX (Tokyo Stock Price Index) inaugurated (January 4,1968=100).
1970 Trading in convertible bonds started; TSE joined the International Federation of Stock Exchanges (FIBV).
1971 Book entry clearing system for stocks introduced
1973 Yen-based foreign bonds listed for the first time; foreign stock section opened.
1974 Market Information System (MIS) put into operation.
1977 Ad valorem brokerage commission system introduced.
1982 Computer-assisted Order Routing & Execution System (CORES) introduced.
1985 Trading started in new market building; trading in 10-year Japanese government bond futures started.
1986 10 securities companies including first six foreign companies joined the TSE membership.
1988 22 securities companies including 16 foreign companies joined the TSE membership; ttrading in TOPIX futures started.
1989 Trading in TOPIX options started; trading in US T-bond futures started.
- Trading in options on Japanese government bond futures started
- 10 securities companies including thee foreign companies joined the TSE membership
- 1990 Floor Order Routing and Execution System (FORES) introduced.
- 1991 Central Depository & Clearing System began its operation
1994 Partial (over 1 billion yen) deregulation of brokerage commission effected.
1995 Investment Trust Beneficiary Certificate linked to Nikkei 300 Stock Index Listed Fund listed
1996 Trading in five-year Japanese government bond futures started
1997 Trading in equity options started.
- Trading in sector-stock price index futures started
- Partial (over 50 million yen) deregulation of brokerage commission effected
- Calculation of new stock price index series started
- ToSTNeT introduced
- TDnet (Timely Disclosure Network) system introduced
- Abolition of restriction on off-exchange trading for listed securities.
- Stock trading floor closed
- Target (TSE wide area network) introduced
- Liberalisation of brokerage commission
- Abolition of the fixed number of members effected
- MOTHERS market for high-growth and emerging companies established
2000 Hiroshima and Niigata stock exchanges merge into TSE; opening of TSE ARROWS.
2001 J-REIT market launched; Tokyo Stock Exchange, Inc. established after demutualisation of TSE.
2003 Commencement of operations at Japan Securities Clearing Corporation.
- Tokyo Stock Exchange Group, Inc established
- Establishment of Tokyo Stock Exchange Regulation
- Commencement of operations at Tokyo Stock Exchange Regulation.
2009 TOKYO AIM, the equity market for professional investors, was launched under TOKYO AIM, Inc, established in a joint venture with London Stock Exchange. (The company later established TOKYO PRO-BOND market, the new bond market for professional investors, on May 17, 2011.)
2010 "arrowhead", the new equity and CB trading system, launched
2012 TSE absorbed TOKYO AIM, Inc in a merger and rebranded the TOKYO AIM market as TOKYO
2013 Japan Exchange Group, Inc established
- Cash equity market of Osaka Securities Exchange (OSE) integrated into Tokyo Stock Exchange (TSE)
- Self-regulatory operations of OSE integrated into Tokyo Stock Exchange Re
- Calculation of JPX Nikkei Index 400 begins
- TSE derivatives market is integrated into OSE
- Allocation of LEI (Legal Entity Identifier) as LOU (Local Operation Unit) begun
- Joint TSE/OSE Hong Kong representative office opened
- Established infrastructure fund market
- Opened joint TSE/OSE Singapore branch office
- Opened joint TSE/OSE Singapore branch office
- Animals to equity: stock market histories of the world
- Major milestones on way to modern stock markets
Top ten stock exchanges of the world
- New York Stock Exchange (NYSE)
- NASDAQ (originally the National Association of Securities Dealers Automated Quotation exchange)
- London Stock Exchange (LSE)
- Tokyo Stock Exchange (TSE)
- Shanghai Stock Exchange (SSE)
- Hong Kong Stock Exchange (SEHK)
- Shenzhen Stock Exchange (SZSE)
- Toronto Stock Exchange (TMX)
- Frankfurt Stock Exchange (FWB)