What Is the Tokyo Stock Exchange (TSE)?
The Tokyo Stock Exchange (TSE) is the largest stock exchange in Japan, headquartered in its capital city of Tokyo. The Tokyo Stock Exchange was established on May 15, 1878. As of Sept. 14, 2021, the exchange had 3,784 listed companies. The TSE is run by the Japan Exchange Group and is home to the largest and best-known Japanese giants with a global presence—including Toyota, Honda, and Mitsubishi.
In addition, the TSE offers specific trading information, real-time and historical index quotes, market statistics, and information about and from specialists. Notably, the acronym TSE for the Tokyo Stock Exchange should not be confused with Canada's Toronto Stock Exchange, which is known by the acronym TSX.
Key Takeaways
- The Tokyo Stock Exchange (TSE) is the largest stock exchange in Japan, listing 3,784 companies (as of Sept. 2021).
- From 1991 to 2001, the TSE shrank dramatically as the Japanese economy contracted after the country's equity and real estate bubbles burst.
- The TSE lists the largest companies in Japan, including Toyota, Softbank, Keyence Corporation, Sony Corporation, and Chugai Pharmaceutical.
- The TSE is comprised of five sections; the first two sections are called the "Main Market" and include large cap and medium cap companies.
- Two sections are reserved for startup companies and the last section of the TSE is for professional investors only.
Understanding the Tokyo Stock Exchange (TSE)
At the peak of the Japanese asset price bubble in Dec.1989, the Nikkei 225 index reached a record high of 38,916. Following this, the TSE's combined market capitalization shrank dramatically over the next two decades, as the Japanese economy struggled with a recessionary environment and the Nikkei plunged in value.
As of Sept. 2021, the board members of the Tokyo Stock Exchange are Director
(Chairperson of the Board) Tsuda Hiroki; Director & Representative Executive Officer, Group CEO Kiyota Akira; Director & Representative Executive Officer, Group COO Yamaji Hiromi; and Directors Iwanaga Moriyuki and Shizuka Masaki.
The five largest stocks by market capitalization listed on the Tokyo Stock Exchange as of the end of July 2021 were (in 100 millions of Japanese yen):
- Toyota Motor Corporation (¥319,936).
- Keyence Corporation (¥147,724).
- Sony Group Corporation (¥143,445).
- SoftBank Group Corp. (¥117,798).
- Recruit Holdings Co. (¥95,465).
When the Tokyo Stock Exchange (TSE) first opened in 1878, some of its first customers were former samurai, who needed a market to trade bonds that had been issued to them by the government.
Other Major International Exchanges
In addition to the Tokyo Stock Exchange, other major trading exchanges worldwide include the New York Stock Exchange (NYSE), the Nasdaq, and the London Stock Exchange (LSE). Each exchange has specific listing requirements that owners must meet prior to offering their securities for trading.
In general, these requirements include regular financial reports, such as audited earning reports, and minimum capital requirements. For example, the NYSE has a key listing requirement that stipulates a company must have at least 1.1 million publicly traded shares of stock with a stock price of at least $4 per share. The company must have an aggregate pre-tax income of $10 million for the previous three fiscal years, with at least $2 million in each of the most recent two fiscal years. Nasdaq requires listers to meet aggregate pre-tax income in the prior three fiscal years of at least $11 million and a minimum bid price of $4.
Criticism of the Tokyo Stock Exchange (TSE)
Some market participants have complained that over the years the TSE has become too large and complicated compared to other global exchanges. The TSE consists of five sections. The first section lists Japan's biggest companies and the second section lists medium-sized companies. Combined, these two sections are called the "main markets."
Then there are two sections dedicated to startups. These sections are called the "Mothers" (Market of the High-Growth and Emerging Stocks) and the Jasdaq (which is separated further into standard and growth sub-sections). The final section is the Tokyo Pro Market, which is for professional investors only.
To complicate matters, each of these TSE sections has its own listing requirements. As of Sept. 14, 2021, the first section alone included about 2,190 companies, almost double the level from 1990. A plan to reform the TSE includes simplifying the criteria separating the sections and reducing the number of sections to three—Prime, Standard, and Growth. Another possible change includes increasing the market cap requirement to reduce the number of companies listed in the top tier.
FAQs
The Tokyo Stock Exchange (TSE) is the largest stock exchange in Japan and lists the nation's biggest companies, including Honda, Toyota, and Sony. The Topix Core 30 Index is a market index of the 30 most highly-capitalized stocks on the Tokyo Stock Exchange Topix index.
What is the Tokyo Stock Exchange summary? ›
The Tokyo Stock Exchange (TSE) is the largest stock exchange in Japan, headquartered in its capital city of Tokyo. The Tokyo Stock Exchange was established on May 15, 1878. As of Sept. 14, 2021, the exchange had 3,784 listed companies.
How does the stock exchange stock market work? ›
The stock market is where investors buy and sell shares of companies. It's a set of exchanges where companies issue shares and other securities for trading. It also includes over-the-counter (OTC) marketplaces where investors trade securities directly with each other (rather than through an exchange).
How did the stock market works? ›
The stock market is where shares of companies and other financial instruments are bought and sold. It's a network of all-stock trading where investors and traders buy and sell stocks. These trades determine stock prices, reflecting the company's perceived value and market conditions.
What is the meaning of TSE exchange? ›
Tokyo Stock Exchange (TSE), the main stock market of Japan, located in Tokyo, and one of the world's largest marketplaces for securities. The exchange was first opened in 1878 to provide a market for the trading of government bonds that had been newly issued to former samurai.
Why is the Tokyo Stock Exchange important? ›
The TSE is one of the major global stock exchanges which provides international investors access to a wide range of companies in numerous sectors across Japan. Since its trading hours overlap with other major markets in Asia, America, and Europe, it further allows for more extended trading opportunities.
Where is the Tokyo Stock Exchange? ›
Its headquarters are located at 2-1 Nihonbashi-Kabutochō, Chūō, Tokyo which is the largest financial district in Japan.
How does the stock exchange work for dummies? ›
Stock prices on exchanges are governed by supply and demand, plain and simple. At any given time, there's a maximum price someone is willing to pay for a certain stock, known as the bid price. There's also a minimum price someone else is willing to set for the shares of stock, known as the ask price.
How does a stock exchange make money? ›
The exchanges are for-profit ventures and charge a fee for the services they provide. Most of their revenue comes from the transaction fees charged for each trade made on their platform.
What is share market in simple words? ›
By definition, it is a market place where trading of shares of public listed companies is carried out daily. The primary market is where the companies float the shares to the public; the extending of shares in the open market is known as Initial Public Offering- IPO, mainly for market capitalisation.
Stocks are financial assets, not real assets. Financial assets are paper assets that can be easily converted to cash. Real assets are tangible and therefore have intrinsic value.
Who buys stocks when everyone is selling? ›
But there's one group of investors who charge in to buy when stocks are selling off: the corporate insiders. How do they do it? They have 2 key advantages over you and me that provide them the edge during uncertain times. If you follow their lead, you can have that edge too.
Do you get money from the stock market? ›
Yes, you can earn money from stocks and be awarded a lifetime of prosperity, but potential investors walk a gauntlet of economic, structural, and psychological obstacles.
Which stock market is TSE? ›
See what's hot and trending on Toronto Stock Exchange (TSX) today.
What type of market is the TSE? ›
Toronto Stock Exchange
| Type | Stock exchange |
| Location | Toronto, Ontario, Canada |
| Coordinates | 43°38′53.88″N 79°22′59.88″W |
| Founded | 25 October 1861 |
| Owner | TMX Group |
8 more rowsThe Toronto Stock Exchange trading hours are from 9:30 am to 4:00 pm (Eastern Time), Monday to Friday, except for the holidays listed on this page.
What is the Tokyo Stock Exchange index known as? ›
The Tokyo Price Index—commonly referred to as TOPIX—is a metric for stock prices on the Tokyo Stock Exchange (TSE). TOPIX is a capitalization-weighted index that lists all firms in the "first section" of the TSE, a section that organizes all large firms on the exchange into one group.
What is the main trade in Tokyo? ›
Trade In January 2024, the top exports of Tokyo were Commodities not elsewhere specified (¥118B), Industrial Printers (¥32.5B), Motor vehicles; parts and accessories (8701... (¥25.3B), Machines and apparatus of a kind... (¥19.8B), and Disc Chemicals for Electronics (¥18B).
What happened in Japan stock market? ›
The Nikkei Stock Average is up 19.8% in the year to Wednesday, outperforming even the bulls' expectations. The benchmark average on Monday topped the 40,000 mark for the first time, buoyed by a fervor for semiconductor stocks, after surpassing its 1989 peak on Feb.
How is the Tokyo Stock Exchange regulated? ›
Tokyo Stock Exchange is located in Japan and is regulated by the TSE is Self-Regulated through JPX-R & supervised in collaboration with the SESC.
