Japanese Security Exchanges (Pt. 2)

November 29, 2023

The 40+ and 30-year share trading volume statistics for the Tokyo Stock Exchange (JPX) show growth, but that is somewhat misleading. In the most recent 20 years and 10 years, the growth has subsided and eventually contracted.
But this doesn’t mean that the JPX wasn’t growing. Because, beginning in 1985, derivatives began to trade. While stock trading rose 2.1x between 1986 and 2022, derivatives volumes exploded, rising 26-fold.
And even within Derivatives, which is not a singular thing, new growth categories arose, even as some faded. Between 1996 and 2022, Nikkei 225 mini futures contracts expanded by 26% a year.
That’s an illustration of why ‘stock exchanges’ hardly exist anymore in the classic sense; they evolved into securities exchanges.

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