Veteran Exchange Executive Gives Exclusive Video Interview to JLN

Iwanaga Moriyuki, President and CEO of the Osaka Exchange (OSE), updated John Lothian News about several important exchange initiatives at Japan Exchange Group (JPX) in an interview over Zoom last week. He spoke with John Lothian from Tokyo, with an image of the Osaka Exchange projected behind him, and gave JLN an exclusive interview.

Iwanaga spoke about the new derivatives trading platform for Tokyo Commodity Exchange (TOCOM) and OSE, J-GATE 3.0, launched last September and how that has improved the markets. 

He told how active market participants, including domestic retail traders, have asked for better access to JPX markets during market holidays. Japan has the “highest number of market holidays in the world,” he said. Starting in September, OSE will introduce holiday trading to its derivatives market. 

Iwanaga also shared an update on the restructuring of the Tokyo Stock Exchange (TSE) cash markets into three new segments. Instead of the Market of the high-growth and emerging stocks (Mothers) and JASDAQ with two independent emerging boards, the new segments are Prime, Standard and Growth. Iwanaga said he believes this will have a boosting effect on the whole market and the Nikkei 225 and the JPX Nikkei 400.

Interest rate products were also discussed in the interview, with Iwanaga noting there is increased interest in the 20-year JGB futures because of the rise of inflation. The CME has recently announced its own 20-year U.S. Treasury Bond futures that start this week, so this seems to be sweet spot on the interest rate curve.

TOCOM is introducing liquefied natural gas (LNG) futures in April after adding electricity in September of 2019. Iwanaga said, “Judging from Japan’s position in the LNG space, it is the natural extension of our market to also host the global derivatives benchmark in that space.” 

“Enriching our energy market’s liquidity and improved domestic price discovery and price formation onshore will create more efficient hedging tools, which should in turn contribute to the overall efficiency of markets and strengthen the Japanese industry as a whole,” he said.

Also, the market integration of TOCOM and OSE has strengthened market depth and the client pool for both markets. JPX wants to further grow this group by offering smaller sized contracts that are becoming so popular around the world. He said JPX also wants to throw its ring into the newly formed carbon market that will be established in Japan.