Tadashi Ezaki, President & CEO
Let me begin by wishing you all happiness and prosperity in the New Year!
In 2013, the Japanese economy finally took on an upbeat tone as the yen weakened and the stock market surged under “Abenomics”. Internationally, fears of economic vulnerability lingered with markets responding to concerns of a recurrence of the European debt crisis, slower growth in China, the timing for the tapering of QE3 and a U.S. government shutdown. These concerns led to active trading on TOCOM in the first half of the year as gold prices reached all-time highs in February. Later in the year, markets were subdued on widespread uncertainty over the future course of the global economy, which made for an unusually challenging year.
The exchange made a new start in 2013 with the launch of the Agricultural Product & Sugar Market and transformed TOCOM from a solely industrial to more broadly focused commodity exchange. Considering its significance and commercial utility, we have an important role in restoring the vitality of the Agricultural Product & Sugar Market. We will continue to work together to invigorate the entire TOCOM market in the new year.
In late November last year, TOCOM joined hands with Ginga Energy Japan to finance and found the Japan OTC Exchange, a new platform for OTC swap trading. TOCOM plans to improve access to OTC markets this year and should lead to increased hedging in the futures market. This also coincides with JCCH’s preparation to offer OTC clearing in the coming months.
In the new year, we plan to implement four additional business initiatives designed to spur growth and open new prospects for Japan's commodity market: the development of a comprehensive energy market; the establishment of collaborative projects with other exchanges; efforts to promote regulatory improvements and; to return the business to a financially sound footing.
Firstly, we will continue to develop energy market offerings. This includes the preparations of futures trading for LNG and electricity that, in combination with existing petroleum products, will create a comprehensive slate of energy products. Secondly, we intend to drive forward collaborative efforts with other exchanges and set discussions with CME for possible cooperation in the energy sector. We will explore synergies as well between the commodity and financial markets with domestic financial exchanges such as JPX. Thirdly, we will work together with market participants, industry associations and regulators to eliminate various institutional obstacles, improve the system of taxation and optimize overly restrictive regulations on the solicitation of retail investors. And finally, we will accelerate efforts to improve our business through aggressive business expansion, further cost reductions in IT infrastructure, etc., and the reinforcement of our financial base.
I believe that this year will be a crucial test for our firm and the industry in general. In the new year, I sincerely hope that we can all move together towards a bright future. I highly appreciate your continued support and collaboration along the way.
