Tokyo Stock Exchange

The Tokyo Stock Exchange is the most prominent stock exchange of Japan. The stocks that are listed under the Tokyo Stock Exchange are classified into:

1.First Section aimed for large companies
2.Second section for mid-sized companies
3.Mothers sections for the high growth start up companies.

Participation in the Tokyo Stock Exchange

89 domestic and 19 foreign securities company participate in the Tokyo Stock Exchange Trading.

Evolution of the Tokyo Stock Exchange

• The Tokyo Stock Exchange started as Tokyo Kabushiki Torihikijo on May 15, 1878.
• In 1943 the Tokyo Kabushiki Torihikijo merged with other stock exchanges of Japan to form the Japanese Stock Exchange.
• After Nagasaki was bombed the Tokyo Stock Exchange was closed but it was reorganized soon.
• In the post war era the Tokyo Stock Exchange reopened in 1949 with its current name.
• Between the period 1983 to 1990 the Tokyo Stock Exchange witnessed an extraordinary growth. As far as the market capitalization was concerned the Tokyo Stock Exchange occupied about 60% of the market capitalization of the whole world. Although the performance of the Tokyo Stock Exchange has fallen since then, even now it ranks the third largest in terms of the market capitalization of the listed shares.
• In 2001, the Tokyo Stock Exchange took the form of a corporation.

Initially the Tokyo Stock Exchange was a physical stock exchange where trading took place by the open outcry system. But in April 30, 1999 the Tokyo Stock Exchange closed and switched over to an electronic mode of transaction.

Indices used in Tokyo Stock Exchange

The indices that are mainly used in to track down the performance of the Tokyo Stock Exchange are:

• Nikkei 225 of companies that is selected by Japan’s largest business newspaper- the Nihon Keizai Shimbun
• Topix Index: This index is based on the share prices of the First Section Companies.
• J30 Index: This index caters to the large industrial companies that are maintained by Japan’s major broadsheet newspapers.

Issues relating to Information Technology

A new transaction system was installed by Fujitsu to manage large scale transactions. But due to bugs in the system the Tokyo Stock Exchange could operate only for 90 minutes on November 1, 2005. Trading was stopped for four and a half hours. Again while the Initial Public Offering of J-Com, an employee of the Mizoho Securities Co. Ltd made a typing error due to which there was a net loss of 347 million US dollars. This loss was shared between the exchange and the Mizoho Securities Co. Ltd. Such incidents simply reflect the lacunae of the Tokyo Stock Exchange relating to error checking, adequate safeguards, reliability, transparency, testing, confidence and profits.