Trading in Japan

In the coming years Japan will face strong competition from other Asia-Pacific capital markets in attracting global traders, but currently it already offers a compelling package: its capital markets are among the biggest in the world, up-to-date infrastructure is in place and two main stakeholders, government and JPX have set their minds to continuously make the country more welcoming to traders from abroad.

Market Snapshot

Japan has long been famous for its technology innovation and business excellence, however the country has been somewhat conservative in developing its financial services industry. Still, with recent regulatory reforms and market structure updates, the country has a lot to offer traders looking to expand in the Asia-Pacific region.

At first glance, Japan’s exchanges might appear less welcoming to international participants than some of the other large regional markets like the Singapore and Hong Kong Exchanges, which have a higher proportion of listed foreign stocks and traders. Yet Japan’s economy is the 3rd largest in the world, and the country has numerous homegrown and internationally competitive corporations. The Japan Exchange Group, Japan’s main exchange operator, also ranks an impressive third globally in terms of largest exchanges by market capitalization.

Recently some trading has moved from Japan to Hong Kong and Singapore. Although most of these lost trades were proprietary trading, the Japanese government and regulators are determined to reverse the trend and promote the development of Japanese capital markets. As a step in that direction, in 2012, the regulators approved the merger of the Osaka Stock Exchange and the Tokyo Stock Exchange into the Japan Exchange Group (JPX) in order to create a strong, diversified and globally competitive platform. Various different asset classes and instruments are available on the Japanese markets as is low-latency trading, which was launched on the Tokyo Stock Exchange’s (TSE) Arrowhead platform in 2010.

In the coming years Japan will face strong competition in attracting global traders from other Asia Pacific capital markets, but it offers a compelling package. Its capital markets are among the biggest in the world and up-to-date infrastructure is in place. Japan also has the support of its two main stakeholders: the government and the JPX, both of which are focused on continuously improving markets to attract more international traders and provide one of the most stable and robust markets in Asia.

Equinix (Nasdaq: EQIX) is the world's digital infrastructure company, enabling digital leaders to harness a trusted platform to bring together and interconnect the foundational infrastructure that powers their success. Equinix operates a global interconnection platform of more than 200 International Business Exchange™ (IBX®) data centers in 63 metros across 26 countries.
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