The Japanese Stock Market And The Japanese Stock Market

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Japan has one the most advanced economies in the world, with an advanced economy comes an advanced equity market. As other advanced equity markets are, the Japanese market is similar to the U.S. in its essential functions and its operation by the exchanges that allow its existence. The Japanese stock market is third largest in the world by market capitalization, surpassed only by the United States and China. Market participants trade over the Tokyo Stock Exchange and the Osaka Securities Exchange which combined to form the Japan Exchange Group (JPX) in 2013 (JPX.com). As of November 2015 there were 3500 companies listed as part of the JPX and over $400 billion dollars of shares traded in 2014 (World Federation of Exchanges).
The role of Japan’s
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Like other developed exchanges it provide a multitude services that make participating in the Japanese market easy, safe and efficient. By being an exchange alone it provides efficiency in the market. All participants know where they can find each other, what is available sale, how many shares are for sale, and what prices are trades executing at. Having a single place where the two parties meet to conduct trades also adds liquidity to the Japanese market. If a recent purchaser of stock decides that he no longer wants ownership of that stock he can put it back on the market immediately where the exchange will match his trade with a buyer whose was looking to purchase shares in that company. The seller does not have to put excessive effort into looking for a new buyer, any potential buyer is already on the exchange waiting to make a trade at a fair price. Market participants only have to send their trades, the Japanese exchange will match them at similar prices which leads to next benefit to Japan of having exchanges; price discovery. Price discovery happens much faster when trades are conducted over on exchanges. There are no long negotiations over the price of a share, a share is worth the price at which the last trade was executed. The JPX provides all of these benefits through its operation and adds further efficiency to markets through technology. Technology has shaped the development of the Japanese equity market…show more content…
The essentials of IPOing in Japan are the same as they in the U.S. A company must select an underwriter to take charge of their IPO, that underwriter will then oversee the pricing, quantity, and actual sale of the stock. Once the sale is complete the proceeds will be transferred to the issuer. Stock listed on Japanese exchanges are divided into sections. The first two sections make up what are called the “Main Markets”, this is where the leading large and second tier Japanese and foreign companies are listed. The first of the two sections is especially view as top market for its size, liquidity, and the volume of foreign investors (Japan Exchange Group), while the second is for medium sized companies. The third section is called the Market of The High-growth and Emerging Stocks or (MOTHERS), a trading market for companies with high growth potential. What

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