The Tokyo Stock Exchange is considering joining up with its main Japanese rival – in Osaka to counter rising competition from overseas and keep it as one of the world’s major bourses.
Tokyo has a dominant position in cash share trading and the smaller Osaka Securities Exchange is more focused on derivatives and TSE’s chief executive Atsushi Saito said that could lead to a strong alliance.
However any merger would be at least two years away after the Tokyo exchange launches an initial public offering of its shares.
A flurry of mergers and alliances among global exchanges has put the spotlight on the TSE, which is suffering from weak trading volumes and a dearth of new listings, a reflection of the sluggish outlook for the deflation-plagued Japanese economy.
The TSE is now the world’s fourth-biggest exchange by trading volume, having fallen behind Shanghai. A merger with the OSE would help save on system development and other costs, but may do little to reverse its competitive decline.