News Release

Jan. 04, 2021 JPX New Year's Message from Group CEO Kiyota

 

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

I would like to begin my New Year's message by taking a look back over the stock markets in the past year.

Last year, the spread of and response to Covid-19 forced us all to make huge changes to the way we live our lives and the way we do business. In the Japanese stock market, the Nikkei began the year around JPY 23,000, but as Covid-19 began to spread globally, investor outlooks around the world turned negative and prices plunged during February and March. However, due to the unprecedented fiscal stimuli and public spending programs that were carried out across the world, stock prices achieved a V-shaped recovery and the markets regained their pre-Covid levels by the end of summer. In November, the results of the US presidential election and reports of success in Covid-19 vaccine development pushed the New York stock market even higher, and after the Dow Jones climbed above USD 30,000 for the first time, the Nikkei rode the wave to surpass JPY 27,000 for the first time since the stock market bubble burst 30 years ago.

Looking at new stock listings, March and April saw 18 companies cancel or postpone their initial listings, but given the later market rebound, a total of 102 initial listings were carried out over the year, the highest number for 13 years.

Now I would like to introduce some of what JPX has been doing in the past year. In preparation for transition to the new market structure planned for implementation in April 2022, at the end of last year we published an overview of our planned listing rules for the new market segments. The market will be split into "Prime", "Standard" and "Growth" segments. For the Prime Market especially, we expect to implement listing criteria that reflect a new definition for free-float market capitalization and the Corporate Governance Code, which will be revised this year.

With regards to the system failure that occurred on October 1 last year, I would like to sincerely apologize once again for the huge inconvenience and confusion that this caused to market participants and many other people. We are now putting every effort into making sure a similar thing cannot happen again. With the help of market participants, we will be carrying out comprehensive checks and drills of the system and developing rules for trading resumptions, among other things, so we ask for your kind understanding and co-operation through this process.

On the derivatives side, in July last year, we launched a Comprehensive Exchange both in name and substance with the transfer of commodity derivative products from Tokyo Commodity Exchange to Osaka Exchange and the merger of respective clearing houses JCCH and JSCC. With the Japanese government working on the promotion of Tokyo as an international financial center, we at JPX will also put our efforts into running a market that anybody can use with confidence, and providing a market with high liquidity, in both equities and derivatives.

Lastly, I would like to look ahead to this year's market.
Given the current situation with Covid-19 cases, this year I think continued attempts will be needed to deal with the huge challenge of balancing pandemic-related restrictions with economic activity. From this perspective, my feeling is that there are many people who expect a comparatively strong market overall, as the Bank of Japan is likely to continue its policy of large-scale monetary easing and the government is likely to continue its policy of fiscal stimulus. Although Covid-19 has forced restrictions on travel and physical interactions, new business has also been created, for example through the shift to online working and the sudden increase in web-based services. Perhaps we can also expect the growth of other new lifestyles and ways of doing business in the coming year, such as the development of "green" products and services to help achieve Prime Minister Suga's commitment to being carbon neutral by 2050.

There are some big events planned for Japan this year, including the Tokyo Olympic and Paralympic Games and elections for the Tokyo Metropolitan Assembly, the leadership of the ruling party, and the national House of Representatives. Internationally, there is a lot of interest in how the administration of US President Biden will start off, and what kind of policy changes it will make. US-China relations are surely another point to keep a close eye on.

2021 is the Year of the Ox, which in Japanese financial proverbial tradition is considered a difficult year for progress, but which also alludes to the bull, a symbol of financial success in the English-speaking world. I would like to believe that the English meaning will win out this year.

I hope that that 2021 can be a better year for the Japanese financial markets and for everyone.


Akira Kiyota
Director & Representative Executive Officer, Group CEO
Japan Exchange Group, Inc.

Contact

Japan Exchange Group, Inc. Corporate Communications
TEL:+81-3-3666-1361