Insights

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 you know, we started last year with bright expectations, as the market had been at its highest point since the 1980s bubble in the previous year. However, things changed with the invasion of Ukraine by Russia on February 24: the surge in energy and resource prices triggered inflation across the globe, prompting central banks in Europe, the U.S., and around the world to raise interest rates rapidly and on a large scale.

Amid such global instability, in the Japanese market, the Nikkei 225 dropped below JPY 25,000 to hit its lowest level of the year on March 9, immediately after Russia's invasion of Ukraine, but stock prices were then pushed back up by relatively strong corporate earnings and remained firm in the range of JPY 26,000 to 28,000 for the rest of the year.

Now I would like to move on to what JPX worked on in 2022 and will work on in 2023.

In April last year, Tokyo Stock Exchange restructured its market divisions into three segments: Prime, Standard, and Growth. The objectives of the market restructuring are to support listed companies' enhancement of corporate value and to offer an attractive market that has the approval of domestic and international investors. This was just the beginning, and we will continue our efforts to encourage listed companies to achieve sustainable growth and increase their corporate value over the medium to long term.

In the derivatives market, in April last year we implemented permanent listing of electricity futures and trial listing of LNG futures, followed by the start of holiday trading in September. In May of this year, we plan to list Nikkei 225 micro Futures and short-term interest rate futures, and we will strive to further expand the product lineup to satisfy user needs.

In addition, with our new subsidiary JPX Market Innovation & Research, Inc. (launched April 2022) playing a central role, we will take on new challenges such as digitization, diversification of data services, and promotion of sustainability without being constrained by the traditional exchange framework.

Last year, the government formulated a substantial plan to double asset-based income, which includes the drastic expansion of the NISA system and making the system permanent, and the enhancement of financial and economic education. As a market infrastructure, JPX is also determined to make a solid contribution to this and work toward a virtuous cycle of growth and distribution.

Exactly 10 years ago, on January 1, 2013, Tokyo Stock Exchange and the former Osaka Securities Exchange merged to form Japan Exchange Group, JPX. Today, JPX takes its first step into a new decade. 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.

This year, we will need to continue to pay close attention to trends in monetary policy around the world, particularly in the U.S. and Europe, the impact of last year's monetary tightening on the U.S. and European economies, geopolitical risks such as developments in Ukraine, and uncertainty over China's economic outlook after the lifting of its "zero COVID" policy.

However, if we look at Japan, the profitability of Japanese companies and their ability to respond to changes are improving, and economic activities have returned to normal from the COVID-19 pandemic, so I am hopeful that Japan's economic outlook will remain firm. Factoring these issues in, I feel that there are many people expecting this year to provide robust market development overall.

2023 is the Year of the Rabbit. As rabbits hop, I am hopeful that the stock market, in line with Japanese financial proverbial tradition, will make a great leap forward in the year ahead.

I hope that 2023 can be a better year for the Japanese financial markets and for everyone.

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