A comprehensive exchange that handles gold, rubber, stock price indices and other futures started in earnest on Monday, meaning investors can now deal with various derivatives in a single trading account.
The move is aimed at revitalizing Japan's sluggish commodities market.
The Japan Exchange Group, Inc. (JPX) on Monday transferred gold and rubber, and other futures trading of its subsidiary Tokyo Commodity Exchange Inc. (TOCOM) to Osaka Exchange Inc. The Osaka Exchange, also under the umbrella of the group, has become a comprehensive exchange for derivatives, covering financial products such as Nikkei-225 futures and 10-year Japanese government bond futures.
According to the Osaka Exchange, about 10 new companies including securities firms are expected to deal in commodities futures following the launch of the comprehensive exchange. TOCOM will specialize in trading energy-related derivatives such as Dubai crude oil and electricity.
Derivative transactions in the commodities sector have been growing rapidly, with global transactions increasing nearly 10-fold from 761 million units in 2005 to 7.221 billion units in 2019. A unit is the smallest tradable amount. Meanwhile, domestic transactions plunged from 113 million units to 19 million units. The Tokyo Commodity Exchange has been in the red for several years and became a subsidiary of JPX last autumn.
In 2007, Prime Minister Shinzo Abe floated the idea of creating a comprehensive exchange. The Financial Services Agency, which oversees the Osaka Exchange, and the Economy, Trade and Industry Ministry, which oversees TOCOM, and the Agriculture, Forestry and Fisheries Ministry had trouble adjusting their jurisdictions and took more than 10 years to reach an agreement.
On the first morning of trading after the transfer, the Osaka Exchange saw the price of the benchmark of gold futures rise 171 yen to 6,568 yen per gram, up from the previous trading day's closing price. It broke the 1982 high for the third consecutive business day.
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