Tokyo Stock Exchange
History of the Tokyo Stock Exchange - TSE
The TSE is located in Tokyo, Japan. It is now the third largest stock exchange in the world. The Tokyo Stock Exchange Co., Ltd. was initially established on May 15, 1878. On June 30, 1943, the Japan Securities Exchange was formed by merging all existing stock exchanges in Japan. The Japan Securities Exchange was dissolved in April of 1947. The Tokyo Stock Exchange of today emerged in the years after World War II.
The current Tokyo Stock Exchange was founded on April 1, 1949, almost two years after the Japan Securities Exchange was dissolved. It took until October 1966 for government bonds to be traded. The foreign stock and bond section was opened in 1973. In February of 2007, an agreement was reached between the TSE and the London Stock Exchange. By that time, the TSE had broadened their offerings.
Major Types of Securities Traded on the TSE
Stocks
As of the end of November 2011, there were 2,096 companies listed on the TSE and the number of shares of stock listed was over 380.5 million. The market capitalization at that time was greater than 253,969.5 million yen - or about $3.3 billion USD at the present exchange rate.
Bonds
Bonds were added in April 1956 and convertible bonds began trading in May of 1970.
Derivatives
Trading in stock index futures began in September of 1988 and equity options in 1997.
ETFs - Exchange Traded Funds
The TSE began trading in ETFs on July 13, 2001.
Most Active Companies in November 2011
1. Toyota Motor Corporation (NYSE: TM)
Toyota was the fourth most active on the TSE for November 2011. Trading recently at around $68 with a three-month average volume of 507,832, Toyota manufactures and markets automobiles and commercial vehicles.
2. Mitsubishi UFJ Financial Group, Inc. (NYSE: MTU)
Mitsubishi was the eighth most active on the TSE during that month. At $4.35 recently, this is a low-priced stock that trades actively. The three-month average volume was more than 2.2 million shares. Highly diversified, this company offers many financial services to both individual and corporate customers.
3. Sony Corporation (NYSE: SNE)
Sony was the fifteenth most active on the TSE in November 2011. It is trading at around $17.50 with a three-month average volume at almost 1.3 million shares. Sony develops, manufactures, and markets electronic gear for both individuals and industry.
4. Honda Motor Co., Ltd. (NYSE: HMC)
Honda was the fourteenth most active on the TSE for that month. It traded recently around $32 and has a three-month average volume of about 178,000. It manufactures and markets motorcycles, automobiles and power products. The markets include North America, Europe and Asia.
The Influence of the TSE Worldwide
President Atsushi Saito high-lighted several efforts that the Tokyo Stock Exchange is making in his New Year's message on January 4, 2012 (http://www.tse.or.jp/english/news/30/120104_a.html). These efforts are intended to enhance their participation in the international capital market. They are planning to combine with the Osaka Securities Exchange and are setting up a network connection with the NYSE Euronext.
TSE already has improved their exchange software so that trading online is easier and faster. According to their annual report, this software has "achieved 2 millisecond order response time (time between acknowledging receipt of an order from a trading participant and sending an acceptance response)".
They have increased their trading hours and added foreign companies to their list of companies. Being the third largest stock exchange in the world assures they will be an influence on finances worldwide.
Tokyo's Financial Industry
Japan's financial industry is based in the Nihonbashi area of Tokyo, and is home to a large number of major financial institutions including the Tokyo Stock Exchange, Tokyo Financial Exchange and the Bank of Japan.