Tokyo Commodity Exchange Launches Electricity Futures

The Tokyo Commodity Exchange announced today’s launch of its Electricity Futures Contracts (East Area Baseload, West Area Baseload, East Area Peakload and West Area Peakload Electricity). Volume for the first trading day totalled 44 contracts, including off-floor volume of 20 contracts.

“I am delighted to report the launch of TOCOM Electricity Futures market today and I would like to deeply thank all of the parties involved for their cooperation. This includes our regulators, members and the electric utilities,” commented Takamichi Hamada, President & CEO of TOCOM.

“In looking at the experience of other electricity futures markets, it will take some time for trading volume to grow. Our market may start small, but we believe it will grow and we will encourage its healthy development.” Mr. Hamada continued, “In particular, twenty lots of the Oct. 2019 East Area Baseload contract changed hands between non-Japanese traders shortly before the first trading session commenced. This confirmed Japan’s electricity futures are attracting the interest of global market participants. It also proves our market can serve in clearing OTC transactions, which is widely available in Europe and the U.S.A. In these countries, OTC transactions are often cleared in the electricity futures markets to hedge credit risk. We see the prospects for this in Japan.

Finally, we are fully committed to building this market, which will contribute to the development of our country’s electricity industry with benchmark prices and hedging tools for spot market.”

【Quotes for Electricity Futures on September 17, 2019】       　　　（Unit: Yen per kWh）

East Area Baseload Electricity （Volume: 21 contracts, including off-floor volume 20 contracts）

West Area Baseload Electricity  (Volume: 0 contract)

East Area Peakload Electricity（Volume: 23 contracts）

West Area Peakload Electricity（Volume: 0 contract）