Tokyo Stock Exchange: New Year's Message From President Saito

With the coming of the New Year, I would like to offer my warmest greetings and wish everyone health and prosperity in 2012. Also, to the many people still suffering in the wake of the earthquake, we continue to send our hopes and prayers for a restoration of normal everyday life as quickly as possible.

Though the European Debt Crisis has been posing the greatest risk to the global economy after its resurgence last summer, regions outside of Europe are grappling with their own economic issues. This situation leaves many uncertainties regarding the future of the world's economy. Some economic indicators in the US are finally recovering. However, it will likely take some time before a full-fledged economic recovery is achieved. There are still a number of obstacles on this road, including excessive household debt, expanding fiscal deficit, and opposition to economic measures in Congress. Furthermore, China, which has done much to lead the world's economic growth, has its own set of issues. Despite continued growth in its inlands, a difficult balance between inflation control and economic growth is being sought. Uncertainties in the US and European economies are also causing concerns for emerging countries which rely on developed countries for export.

When viewing our own situation, the Japanese economy is in a relatively stable position from a global standpoint. While the effects of the historically strong yen and deceleration of worldwide economic growth cannot be ignored, domestic and foreign institutions and analysts are predicting relatively high levels of Japanese economic growth compared to other developed countries due to fulfilling demand for disaster recovery and harnessing Asian economic growth. In fact, corporate management has become more active as seen in their strenuous pursuit of capital investments and M&A activities. With IPOs doubling in 2011 on the previous year among other factors, there are many positive signs for the future. The worldwide trend of avoiding risk, triggered by the European Debt Crisis and increased regulations on financial institutions, has also been remarkable in the Tokyo market. In light of brisk economic conditions and proactive corporate activities in Japan, I hope that the Tokyo market will be revitalized and restore its strength with plenty of IPOs by companies with high growth potential.

We, at TSE, are committed to pursuing the establishment of a more convenient market that appeals to companies and investors in both Japan and abroad to be chosen as "a place for fund-raising" and "a place for investment". To achieve this, we are engaged in a number of initiatives to increase liquidity, including an increase in the number of IPOs, the listing of ETFs and other attractive products, further enhancements to system capabilities, and a mutual network connection with NYSE Euronext.

Following the great earthquake disaster, I was reminded of the straightforward idea of a "Japan that coexists with the World". In the direct aftermath of the disaster, the discipline and caring minds of the Japanese people were praised throughout the globe. Many marveled at on-site staff abilities with their speed and skill to overcome the difficulties they faced, notably "disruptions in the supply-chain". I believe that these facts restored our awareness of the world's high acclamation of the Japanese sense of values and our country's role in the global economy.

In addition, I am truly grateful for and deeply impressed by the large amount of good will and support from all parts of the worlds immediately after the disaster, including small countries which are not as economically fortunate. The feeling of "global unity" left a deep impression on my heart. As we move into the future, I believe that not only in the economic field, but also in other various areas, we must demonstrate a more confident attitude on pro-actively interacting, asserting ourselves, and understanding one another on a global basis.

TSE is planning to complete a business combination with Osaka Securities Exchange a year from today in order to continue serving as an international capital market with an established presence within the rapidly growing Asia region. We are confident that this combination will invigorate the Japanese securities market, and by extension assist in the restoration of Japanese economy.

I thank you for your support and cooperation as we continue into 2012.