What Is the Tokyo Stock Exchange (TSE)?

What Is the Tokyo Stock Exchange (TSE)?

Let me tell you about the Tokyo Stock Exchange, or TSE—it's the biggest stock exchange in Japan, right there in Tokyo. It started back on May 15, 1878, and as of September 14, 2021, it had 3,784 companies listed. The Japan Exchange Group runs it, and you'll find huge Japanese names like Toyota, Honda, and Mitsubishi trading there, all with a global footprint.

Beyond that, the TSE gives you real-time and historical index quotes, market stats, and specialist info. Just remember, TSE means Tokyo, not to be mixed up with Canada's Toronto Stock Exchange, which goes by TSX.

Key Takeaways

Here's what you need to know: The TSE is Japan's top exchange with 3,784 companies listed as of September 2021. It took a big hit from 1991 to 2001 when Japan's economy tanked after the equity and real estate bubbles burst. You'll see giants like Toyota, Softbank, Keyence, Sony, and Chugai Pharmaceutical there. The exchange has five sections—the first two are the 'Main Market' for large and medium cap firms, two for startups, and one just for pros.

Understanding the Tokyo Stock Exchange (TSE)

Think back to December 1989, at the height of Japan's asset bubble—the Nikkei 225 hit a record 38,916. Then it all crashed, and over the next two decades, the TSE's market cap shrank as the economy recessed and the Nikkei dropped hard.

As of September 2021, the board includes Tsuda Hiroki as Director and Chairperson, Kiyota Akira as Group CEO, Yamaji Hiromi as Group COO, and Directors Iwanaga Moriyuki and Shizuka Masaki.

Fast Fact

When the TSE opened in 1878, some of its earliest traders were former samurai swapping government-issued bonds.

Other Major International Exchanges

Besides the TSE, you've got big players like the New York Stock Exchange (NYSE), Nasdaq, and London Stock Exchange (LSE). Each has strict listing rules—things like regular financial reports and minimum capital. Take the NYSE: It requires at least 1.1 million publicly traded shares at $4 each, plus $10 million in aggregate pre-tax income over three years, with $2 million in the last two. Nasdaq wants $11 million in pre-tax income over three years and a $4 minimum bid price.

Criticism of the Tokyo Stock Exchange (TSE)

Some folks in the market say the TSE has grown too big and messy compared to other exchanges. It has five sections: The first for Japan's biggest companies, the second for medium ones—together that's the 'main markets.' Then Mothers for high-growth startups and Jasdaq (split into standard and growth). The last is Tokyo Pro Market, pros only.

Each section has its own rules, and as of September 14, 2021, the first section had about 2,190 companies—nearly double from 1990. There's a reform plan to cut it to three sections: Prime, Standard, and Growth, simplifying criteria and maybe hiking market cap requirements to trim the top tier.