The Mothering Type: JPX’s index suite shows strong July numbers and new-contract growth

Jim Kharouf

Jim Kharouf


It’s been a solid year for exchanges with some welcome volatility and enough economic moves to keep it interesting. Those are common themes most markets have been able to capitalize on, and the Japan Exchange Group is well in that mix.

July futures volumes showed some solid strength across its index suite with its Topix futures up 22 percent in July with an average daily volume of 1.15 million contracts. Its Nikkei 225 futures volume rose almost 40 percent for the month to 72,820 contracts traded daily. The other notable is its fledgling TSE Mothers Index futures, up 263 percent for the month on ADV of 2,195 contracts and an open interest record of 13,570 contracts.

“Globally, we will see a certain level of volatility,” said Hiromi Yamaji, president and CEO of JPX’s Osaka Exchange, in a recent interview with JLN. “We’ll continue to see interest rates rise and the performance of listed companies is quite strong. That means sentiment in the market will be okay, with some uncertainties. That is a very good condition for our participants.”

The growth of overnight trading on JPX’s markets has been a focal point for some time for the exchange and was 30 percent of volume in July. Yamaji said about 40 percent of transactions on the futures market overnight are coming from overseas participants.  

JPX also has been on an infrastructure upgrade initiative and launched a new clearing and settlement platform in February. Yamaji said the new platform is one of the keys to its growth, particularly with non-Japanese participants. It also upgraded its systems to settle JGB contracts on a T+1 basis in May, from a two-day settlement cycle.

“The purpose of the new system is to have even more flexible risk management and the performance of the system is really quite good,” he said.

The goal for JPX’s derivatives is to continue to build volume on the new products like the Mothers Index futures. The exchange launched Flexible Options on June 25. Given today’s macro-economic environment, flagship products and new contracts could be in for a very good year at JPX.

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