TOCOM Energy

Trading volume for electricity futures listed on Tokyo Commodity Exchange (TOCOM), a group company of Japan Exchange Group (JPX), increased significantly on November 7th, reaching a record high for the first time in two and a half years since May 2022. Trading has gained momentum mainly led by the entry of relatively large financial institutions with higher creditworthiness as a TOCOM’s clearing broker, which had previously been dominated by relatively smaller local brokers.

The total trading volume for TOCOM’s electricity futures contracts on the November 7th totaled 2,100 lots or about 154,000 MWh in terms of electricity. In October, the total monthly trading volume was only 505 lots (about 35,000 MWh). The daily trading volume on the date increased by more than 90 times compared to the average daily trading volume in October.

TOCOM’s Electricity Futures were officially listed in April 2022. Until now, the market liquidity has been limited, and market participants are mostly domestic new power producers and suppliers, which trading style has tendency to dominate one-side position.

To expand the market participant base, TOCOM introduced the new market maker programs, under which market makers quote buy and sell orders, and a service that links a TOCOM Electricity Futures trading with a spot trading at the Japan Electric Power Exchange (JEPX), from October 28.

The number of TOCOM electricity futures participants is gradually increasing along with MUFG Bank’s brokerage service launch from October.