Tokyo Stock Exchange

The Tokyo Stock Exchange was established on May 15, 1878, as the Tokyo Kabushiki Torihikijo (東京株式取引所) under the direction of then-Finance Minister Ōkuma Shigenobu and capitalist advocate Shibusawa Eiichi. Trading began on June 1, 1878.

In 1943, the exchange was combined with ten other stock exchanges in major Japanese cities to form a single Japanese Stock Exchange (日本証券取引所, Nippon Shōken Torihikisho). The combined exchange was shut down and reorganized shortly after the bombing of Nagasaki.

The Tokyo Stock Exchange reopened under its current Japanese name on May 16, 1949, pursuant to the new Securities Exchange Act.

The TSE runup from 1983 to 1990 was unprecedented, in 1990 it accounted for over 60% of the world's stock market capitalization (by far the world's largest) before falling precipitously in value and rank one of the 4th largest exchange in the world by market capitalization of listed shares.

The current TSE building was opened on May 23, 1988, replacing the original TSE building from 1931, and the trading floor of the TSE was closed on April 30, 1999, so that the exchange could switch to electronic trading for all transactions. A new facility, called TSE Arrows (東証アローズ, Tōshō Arrows), opened on May 9, 2000. In 2010, the TSE launched its Arrowhead trading facility.[7]

In 2001, the TSE restructured itself as a kabushiki gaisha ("stock company"): before this time, it was structured as an incorporated association (社団法人, shadan hōjin) with its members as shareholders.

• 
  Old Tokyo Stock Exchange building, circa 1960
• 
  Tokyo Stock Exchange in 1950
• 
  Facade of the Tokyo Stock Exchange
• 
  The annular electric bulletin board on the market center (2018)
• 
  Main room of the Tokyo Stock Exchange (2018)

The exchange was only able to operate for 90 minutes on November 1, 2005, due to bugs with a newly installed transactions system, developed by Fujitsu, which was supposed to help cope with higher trading volumes. The interruption in trading was the worst in the history of the exchange.[8] Trading was suspended for four-and-a-half hours.

During the initial public offering of advertising giant Dentsu, in December 2001, a trader at UBS Warburg, the Swiss investment bank, sent an order to sell 610,000 shares in this company at ¥1 each, while he intended to sell 1 share at ¥610,000. The bank lost £71 million.[9]

During yet another initial public offering, that of J-Com, on December 8, 2005, an employee at Mizuho Securities Co., Ltd. mistakenly typed an order to sell 600,000 shares at ¥1 each, instead of an order to sell 1 share at ¥600,000. Mizuho failed to catch the error; the Tokyo Stock Exchange initially blocked attempts to cancel the order, resulting in a net loss of US$347 million to be shared between the exchange and Mizuho. Both companies are now trying to deal with their troubles: lack of error checking, lack of safeguards, lack of reliability, lack of transparency, lack of testing, loss of confidence, and loss of profits. On 11 December, the TSE acknowledged that its system was at fault in the Mizuho trade. On 21 December, Takuo Tsurushima, chief executive of the TSE, and two other senior executives resigned over the Mizuho affair.[8][10][11][12][13][14][15][16]

On January 17, 2006, the Nikkei 225 fell 2.8%, its fastest drop in nine months, as investors sold stocks across the board in the wake of a raid by prosecutors on internet company livedoor. The Tokyo Stock Exchange closed early on January 18 due to the trade volume threatening to exceed the exchange's computer system's capacity of 4.5 million trades per day. This was called the "livedoor shock". The exchange quickly increased its order capacity to five million trades a day.[17]

On October 1, 2020, for the first time in its history, the Tokyo Stock Exchange had to suspend trading in all shares for a whole day due to a technical glitch, causing buying and selling to freeze. This was announced just minutes before 9 a.m., when it was scheduled to open.[18] The problem was found to be in "the system for relaying market information", hence making the glitch a network problem, but the Asahi Shimbun reported that the glitch was due to a mechanical failure. Japan Exchange Group Inc., which operates the Tokyo Stock Exchange, said that the suspension will be indefinite until the problem is resolved. Other stock markets in Japan have also suspended trading.[19][20][21][22]