Tokyo Stock Exchange (TSE)

Tokyo Stock Exchange - TYO

The Tokyo Stock Exchange is the largest stock exchange in Asia (TSE), which is followed by China, Hong Kong, the BSE, and other exchanges.

On May 15, 1878, the Tokyo Stock Exchange (TSE) was founded. On September 14, 2021, 3,784 firms were listed on the TSE. It’s important to distinguish the TSE from the TSX, which stands for the Toronto Stock Exchange in Canada.

The TSE had a sharp decline from 1991 to 2001 as the Japanese economy shrunk as a result of the country’s equities and real estate bubbles bursting.

The Nikkei 225 index of companies chosen by Nihon Keizai Shimbun, the largest business newspaper in Japan, are the main indices tracking the stock market of TSE. Bond and futures markets are also thriving. TSE trading is done by 94 local and 10 international securities firms.

On September 14, 2021, there were 2,190 enterprises in only the first area, about twice as many as in 1990. Simplifying the criteria for dividing the parts is part of a strategy to overhaul the TSE. The largest corporations in Japan are included in the first section, followed by a list of medium-sized businesses. The Tokyo Pro Market, which is solely open to professional investors, is the last sector.

There are five parts of the TSE. These two areas are referred to as the “major markets” when combined. Then, two sections are devoted solely to startups. The “Mothers” (The High-Growth and Emerging Stocks Market) and the Jasdaq are these parts (which is separated further into standard and growth sub-sections).

As the financial markets have become more globally interconnected, NYSE has tried to collaborate with other important exchanges, such the TSEs.

A bullish reaction on the Tokyo stock market fizzles out after six minutes, whereas one on the New York stock market fizzles out after fourteen. It’s possible that the TSE uses a batch procedure called itayose for generating the opening price, in which trading orders are accepted during the hour before opening, because of which TSE is more effective than NYSE at absorbing the impact at the opening.

In order to alert market participants of a potential increase in stock price, the TSE arranges and issues “Special quotations” whenever the next equilibrium price is anticipated to surpass a specific established limit. If a special quotation announcement doesn’t result in a profitable trade, the following special quote at a one notch higher or lower price is automatically issued at a five-minute interval. This appears to produce a serial correlation in the stock price index at these intervals.