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The Development and History of the Tokyo Stock Exchange.

A brief timeline that pinpoints 10 major events starting from the establishment of the Tokyo Stock Exchange.
by

Kevin Ma

on 25 September 2012

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Transcript of The Development and History of the Tokyo Stock Exchange.

The Development and History of the Tokyo Stock Index (TSX) - the third biggest stock exchange in the world. 1878 - 1949 1998 1985 - 1990 1969 1999 2000 2011 (pt.2) 1878 The Tokyo Stock Exchange Co.ltd was first established on May 15, 1878, as the Tokyo Kabushiki Torihikijo under the direction of then-Finance Minister (Okuma Shigenobu) and capitalist advocate (Shibusawa Eiichi) of Japan. 1943 The exchange was combined with ten other stock exchanges in major Japanese cities to form a single exchange, the Japanese Securities exchange. It was later shut down after the U.S. bombed Nagasaki and also WWII. 1949 On April 1st of 1949, the Tokyo Stock Exchange in the present form was founded, and was opened on May 16th of the same year. On January 1st, 1969, the Tokyo Stock Price Index, commonly known as TOPIX, was established and released to the public.

It is a free-float adjusted market capitalization-weighted index, and is calculated and published by the TSE. This free-float adjusted capitalization-weighted index lists all of the large firms on the exchange into one pool, and is an important index for the TSE. TOPIX is believed to be more representative of the Japanese stock markets than the Nikkei because of fairer presentation of price changes and its inclusion of all major companies that is on the TSE. In November of the year 1990, the TSE introduced a new system to further streamline operations at the stock trading floor.

The system computerized important operations such as placing and matching orders. In 1985, the TSE moved to a newly constructed building. This resulted in a sudden surge of stocks as the new stock trading floor opened.

Also, with the introduction of many new stock sections, investors have a much wider range of securities selection combined with a much more comfortable trading ground. 2012 On June 29, 1998, the ToSTNET (Tokyo Stock Exchange Trading NeTwork) system was created. The ToSTNET has offered investors a means of executing transactions such as block trading and basket trading during off-auction hours. 2001-2005 There are 4 types of trading available on ToSTNeT

Single stock
Basket
Closing price
Off-auction own share repurchase (Since Jan. 15, 2008) In December 2001, a trader at UBS Warburg(Swiss investment bank) sent an order to sell 610,000 shares in this company at ¥1 each, while he intended to sell 1 share at ¥610,000.

The bank lost £71 million. The same incident happened again in December of 2005, when an employee at Mizuho Securities Co., Ltd. mistakenly typed an order to sell 600,000 shares at ¥1, instead of an order to sell 1 share at ¥600,000.

Mizuho failed to catch the error.
Tokyo Stock Exchange initially blocked attempts to cancel the order
US$347 million net loss was shared between the TSE and Mizuho. In the end, the TSE's system was found to be at fault of this transaction, due to
lack of error checking
lack of safeguards
lack of reliability
lack of transparency
lack of testing

This later on, lead to the resignation of 3 senior excutives of the TSE, including the chief executive at that time, Takuo Tsurushima In an effort to
increase speed
reduce cost of transactions
seek further efficiency in the Tokyo market
the TSE closed the stock trading floor entirely, and moved all its transactions online. The last opening session of the year on the stock trading floor is shown to the right. It became the first and largest stock market in Japan that utilized a computerized system to exchange stocks . In July 2012 a planned merger between the TSE Group and Osaka Securities Exchange (OSE) was approved by the Japan Fair Trade Commission. The integration would happen in January of 2013, under the title of Japan Exchange Group The Tokyo Commodity Exchange Inc. is also on the verge of combining forces with the TSEG and OSE, but will wait untill their combination next year to see whose transaction system will be adopted, then the TOCOM will make its decision. In December 2011, the TSE published its PR magazine targeted at overseas investors, called "Evolving Japan". This magazine was created for the purpose of allowing international investors to :

gain insight into the appeal of Japanese companies

learn of the excellent quality of the Japanese economy and its market. Published Quarterly
Currently released its 3rd volume on August 13th, 2012. Replacing the trading floor was the "TSE Arrows", which opened in its place in May 2000. TSE Arrows Consists of:
Market Center
Open Platform
Presentation Stage
TSE Hall
Media Centre
TSE Historical Museum TSE Arrows is a symbol of the Japan securities market, and is also a point of contact for companies and investors. 2011 (pt.1) The TSE unveiled its new mascot on February 23rd, 2011.

It's name is Arrows-kun (a "10-year-old boy"), based on the TSE Arrows.

Also, the design of Arrows-kun comes from the facility's revolving, ring-shaped electric bulletin board, which displays current stock prices. Today, the mascothas already gained a strong fan base

There is also a Twitter account for him as well. (@tse_pr). Hope You Enjoyed It!
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