News Release

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.

As well as the continued Covid-19 pandemic and responses to it, 2021 was a year of big events in Japan, including the Tokyo Olympic and Paralympic Games, the Liberal Democratic Party leadership election which launched a new government under Kishida Fumio, and the general election. In the domestic stock markets, the Nikkei Average began the year at around JPY 27,000, and in February pushed above JPY 30,000 for the first time in over 30 years - since the end of the bubble era.

Through spring and into summer, Covid-19 continued to spread in Japan, and the fast-growing fifth wave during the Olympic season especially caused a negative outlook to spread among investors, pushing the Nikkei Average back down to almost JPY 27,000. Heading into autumn, though, progress towards control of the virus through the rapid vaccine rollout, expectations for the new Kishida government, and a robust New York stock market drove the domestic market back up to another post-bubble record of JPY 30,670 in September.
Though there is concern over rising prices of raw materials globally and the new Omicron variant of Covid-19, the market ended the year continuing to progress steadily at around JPY 29,000.
Looking at the market for initial listings, 2021 saw IPOs of 136 companies, breaking the post-financial crisis record set the previous year. Through the growth of many emerging companies, I think we can look forward to a higher level of dynamism in the Japanese economy.

Now I would like to move on to what JPX worked on in 2021 and will work on in 2022.

This year, April 4 will see the long-awaited launch of our new market structure. We will restructure the current four market divisions of Tokyo Stock Exchange into three new segments, Prime, Standard, and Growth, giving them clearly defined concepts. We will work together with listed companies, investors and all other related parties to make sure that the transition goes smoothly on the day.

Last year, in response to the system failure that resulted in a full-day trading halt of the cash equity market on October 1, 2020, we also worked on recurrence prevention and improving resilience. With the kind cooperation of all market stakeholders, we created new rules and procedures for restarting trading and enacted drills for the industry as a whole, and in October, we announced our plan to extend cash equity trading hours by 30 minutes along with other changes.

In the derivatives market, in September last year we launched the new trading system, J-GATE 3.0. We are now advancing preparations for the permanent listing of electricity futures and trial listing of LNG futures this year, and we also plan to launch holiday trading in September.
As the operator of the core market infrastructure in Japan, JPX will endeavor to run a market that anyone can use with confidence, while also contributing to the development of Japan's financial and capital markets, the growth of the economy, and the realization of an affluent society. I greatly appreciate your continued support in achieving these goals.

Lastly, I would like to talk about the market this year.
The pandemic situation looked to have stabilized a great deal at the end of last year. This year, as expectations grow for economic activity to restart in earnest, I would like to move forward while exercising caution over new variants. Of course, virus mutations and other things mean that the situation is still unpredictable, but in the case of corporate financial results and in general, I think that this year we can expect a transition to living with Covid-19.
In Europe and the US, concerns are growing over inflation caused by Covid-19 economic recovery and high prices of oil and other materials, and central banks are beginning to turn towards tightening monetary policy. How this affects markets, on top of geopolitical risks such as US-China antagonism, will be a crucial point to watch this year. Even factoring these issues in, though, I feel that there are many people expecting this year to provide robust market development overall.

2022 is the Year of the Tiger. As tigers run long distances each day, I am hopeful that this year, in line with Japanese financial proverbial tradition, will prove to be full of vigor and good fortune.

I hope that that 2022 can be a better year for the Japanese financial markets and for everyone.