News Release

Greetings to everyone for the New Year. As JPX Group CEO, I wish everyone health and prosperity for the year ahead.

For my New Year's message, first I would like to take a look back over how last year was for the markets.

2019 was a year where the world saw much confusion and disorder, with protests in Hong Kong and a serious strain in Japan-Korea relations adding to uncertainty over Brexit, further complications in the Middle East, and the US-China trade dispute continuing from the previous year. The Japanese stock market, however, spent most of the year on an upward trajectory. Although the Nikkei began the year floundering below JPY 20,000, it soon rebounded above that point, and stayed above it despite some wobbles into the summer. From fall global markets soared in response to a switch in US monetary policy from tightening to easing, and the Japanese market was no exception, seeing little negative impact from the consumption tax increase in October. The Nikkei temporarily climbed above JPY 24,000 in mid-December, and its year-end closing price was the highest in 29 years.

The Japanese IPO market also continued its good run with 94 IPOs overall. This year we would like to work with the industry to continue listings of high-growth companies and improve the market's overall corporate value.

With respect to the review of the TSE market structure, which has been under debate since fall 2018, the FSA's Financial System Council's expert group compiled a report on the issue at the end of last year. The review aims to establish incentives for companies to create sustainable growth and mid- to long-term corporate value, and a capital markets framework to attract all kinds of investors both domestic and overseas. To achieve this, we will now begin designing the final implementable structure, so we ask for your continued support for the next stage of the journey.

Looking more at what JPX achieved last year, in July, we carried out the shortening of the settlement system to T+2, which had been pending for years. In November, we upgraded arrowhead, our cash equity market trading system, which has so far been running smoothly thanks to the huge efforts of all related parties. And biggest of all, it was the year in which large steps were taken towards the creation of a Comprehensive Exchange. JPX enacted a TOB to make Tokyo Commodity Exchange (TOCOM) a complete subsidiary, with a basic agreement made at the end of March, and a final agreement at the end of July. Now, we will be putting all our efforts into the product transfer to Osaka Exchange and the clearing house merger scheduled for July 2020, so we would like to ask for your continued support.

Finally, I would like to talk about my expectations for the market in 2020.

As you will be aware, during the New Year holiday, the killing of Iran's top military general by the US raised geopolitical risk and caused huge volatility in the oil and foreign exchange markets. It was thought that this year's biggest event would be the US Presidential election on November 3, but if retaliation attacks between the US and Iran escalate, there is a growing risk it could lead to war. Geopolitical disorder in the Middle East is something which the world's capital markets cannot afford to ignore. We will also be continuing to follow closely developments in US-China trade friction and the progress of the US Presidential election, which will no doubt also affect the capital markets.

For Japan, this year will see Tokyo holding the long-awaited 2020 Olympic and Paralympic Games. I hope that our thorough preparations and the atmosphere we create will allow the many overseas visitors to enjoy their stay in Japan without worry.

2020 is the Year of the Rat, considered a symbol of prosperity in Japanese financial proverbial tradition, so we will do our best to overcome whatever risks may arise and make this a good and prosperous year.

I would like to thank everyone for their kind support in 2019, and I hope to enjoy your continued co-operation for the year ahead.