The Tokyo Stock Exchange is the largest stock exchange in Asia and second largest in the world. It dates back to the 1870s and trades in yen. The exchange divides trading into three sectors: large companies, smaller companies, and growing companies. Regulatory authorities oversee trading activity to keep investor confidence high.
The Tokyo Stock Exchange (TSE) is a major stock exchange located in Tokyo, Japan. It is the largest stock exchange in Asia and the second largest stock exchange in the world, behind only the New York Stock Exchange in terms of market capitalization. Stock trading is denominated in yen and occurs in very high volume every day as traders react to conditions within Japan as well as global market pressures.
This stock exchange dates back to the 1870s, when the first form of organized stock exchange was developed in Japan. With the exception of a brief suspension during World War II, the Tokyo Stock Exchange has operated continuously in one form or another since its inception. In 1969, an index known as the Tokyo Stock Price Index or TOPIX was introduced to track the movements of key stocks on the stock market. The sheer size of the Tokyo Stock Exchange leads many investors to use the TOPIX as a general indicator of Japanese economic health, not just a measure of conditions on the stock market.
Securities, derivatives and bonds are traded using electronic trading systems on the Tokyo Stock Exchange. By 2010, more than 2,400 companies were being traded, including some foreign companies. The exchange divides trading into three sectors: large companies are ranked first, smaller companies are ranked separately, and growing companies are known as mothers. The mothers are designed for venture capitalists and other investors interested in fast-growing startups.
The listing on the Tokyo Stock Exchange is determined by evaluating a company to see if it meets the standards of the stock exchange. Companies may be removed from the list if they no longer meet the requirements. Traders interested in actively participating in the exchange must pass certification exams, often under the sponsorship of employers, and must also adhere to ethical standards. Like other stock exchanges, the Tokyo Stock Exchange has dress and conduct codes for traders and trading rights can be suspended for violations. People can also be fined for violating the policy.
Regulatory authorities oversee trading activity on the Tokyo Stock Exchange to monitor for problems, signs of fraud, and other issues. This is designed to keep investor confidence high, as well as shield the Japanese economy from problems caused by the stock market. Many economic news sources regularly list and discuss movements on the Tokyo Stock Exchange and can also provide assessments of trading activity and movements in the overall Japanese economy.
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