Message from the President & CEO

January 2017

Japan’s economy saw some positive turns in 2016. The Bank of Japan’s negative interest policy and increased public spending led to positive growth in real GDP. Towards the end of the year, stock prices rose and the yen weakened against dollar – the “Trump effect”- supported expectations for improved corporate sector performance. Commodity markets experienced quiet stretches in summer into autumn, but saw increased activity after the Brexit vote in June and the U.S. presidential election in November. TOCOM volume increased significantly compared to the prior year.

In reviewing our initiatives to improve and reinvigorate the market last year, I would like to highlight the successful migration of our trading system to the derivatives platform owned by the Japan Exchange Group in September. This resulted in faster order processing and market data dissemination, and improved usability of our marketplace.

I’d also like to mention TOCOM’s entry into the physical market for gold in July, and oil in December. We are developing a comprehensive commodity market by expanding our scope and building on our traditional commodity futures business. We also opened “TOCOM Square” at the Exchange’s headquarters to support our retail investors. The new facility works together with FCMs and related associations to provide commodity investment information to the public.       

In 2017, we are planning numerous projects to bolster the recovery in our markets.

From March, we will start offering Platinum Rolling Spot contracts. They will trade without maturity similarly to the Gold Rolling Spot, which has become a leading product at TOCOM. We expect retail investors and others will find the Platinum Rolling Spot another good investment instrument. In May, we will launch cash-settled oil futures contracts. In the design of this new market, the first contract month is defined as the month corresponding to the physical transaction to meet the industry needs. The market is also designed to provide benchmark prices for off-exchange physical trading. We aim to develop fair and transparent benchmark for the petroleum industry of Japan while reinforcing our mission to support Japan’s industrial infrastructure.  

Finally, TOCOM will continue preparing for the launch of an electricity futures market. Since the power market of Japan was fully liberalized last year, there is growing need for hedging price fluctuation and we want to provide a solution. Along with power, we will continue researching possible LNG and coal listings as part the development of a comprehensive energy market.    

I would like to conclude with the wish that 2017 is one of prosperity and happiness for all participants and friends of the TOCOM market and one of progress for commodity derivatives market of Japan. On behalf of TOCOM, I would request for your continued support and cooperation.

 

Takamichi Hamada
President & CEO
Tokyo Commodity Exchange, Inc.

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