Demand (C,I,G,EX) GDP Supply (labor, capital, productivity) · 2019-05-29 · Demand (C,I,G,EX)...
Transcript of Demand (C,I,G,EX) GDP Supply (labor, capital, productivity) · 2019-05-29 · Demand (C,I,G,EX)...
Demand (C,I,G,EX) → GDP ← Supply (labor, capital, productivity)
Lack of demand was behind the prolonged deflation in Japan.
Quantitative expansion and inflation targeting was effective to stop deflation.
GDP, labor market condition, and corporate profit showed dramatic recovery.
Expanding Money Balance
0
10
20
30
40
50
60
70
80
Monetary Base
US Euro Area UK Japan
(%、GDP ratio)
2
3
日本銀行による総括的検証
2
デフレ脱却、経済再生に向けた政府・日本銀行との連携
○デフレ脱却、経済再生の実現のためには、働き方改革、規制・制度改革、成長戦略、財政政策により潜在成長力を引き上げていくべき。これにより、自然利子率(実体経済の実力で決まる金利)が上昇、金融政策の効果がより一層発揮(自然利子率と実質金利の差が拡大、金融環境がより緩和的に。)。
○今般の「総括的な検証」は、以下の点を総合的に分析し、日本銀行の考えを明らかにしたもの。市場との対話を円滑に進めていく上で、有意義。
・量的・質的金融緩和の導入は、財政政策等政府の取組
みと相まって、実体経済の好転に大きく寄与。日本経済
をデフレではない状況に転換、貸出金利や社債・CP金
利が低下。
・他方、2%の「物価安定の目標」を達成できていないの
も事実。
・総括的な検証において、
過去の物価に引きずられ予想物価上昇率が
十分に引き上げられなかったこと、
マイナス金利政策については金融機関の収益力に
影響(副作用)が生じうる可能性があること
等が明らかとなった。
図1 消費者物価指数
-0.6
0.5
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7
2011 12 13 14 15 16
(消費者物価指数、%)
(年月)
消費者物価指数(生鮮・エネルギーを除く総合)(消費税の影響除き)の前年比(3カ月移動平均)
CPI inflation rate excludingenergy prices and fresh foods
Inflation rate
Three month moving average
Shifting Trend of Inflation Rate
534.1 536.0 545.1 548.5
0
100
200
300
400
500
600
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
(CY)
Nominal GDP, Japan, 1990-2018: It took about 20 years to recover
(Trillion Yen)
(Source) Cabinet Office,Government of Japan, Quarterly Estimates of GDP - Release Archive - 2018 > Oct.-Dec. 2018 (The 1st preliminary),1990-1993:National Accounts of 2009
5
こ のレポート の関連カテゴリこ のレポート の関連カテゴリ W eek ly エコノ ミ スト ・ レター 日本経済
経済研究部 経済調査室長
斎藤 太郎斎藤 太郎 (さいと う たろう )
研究・ 専門分野
日本経済、 雇用日本経済、 雇用
レポート についてお問い合わせレポート についてお問い合わせ
0 3 -3 5 1 2 -1 8 3 60 3 -3 5 1 2 -1 8 3 6
■目次
●GD P 統計の改定で変わった日本経済の姿
・ 2 0 1 5年度の名目GDPが3 2兆円の上方改定
・ 新基準の名目GDPは直近がピークに
・ 名目GDP6 0 0兆円が近づく
・ 直近3年間の実質GDP成長率が大幅上方改定
・ 潜在成長率は1%近く まで上昇
・ 低下する労働分配率
・ 家計の所得分配率が過去最低水準まで低下
・ 家計の所得分配率を高めることが重要
【 次ページ】 G D P 統計の改定で変わっ た日本経済の姿【 次ページ】 G D P 統計の改定で変わっ た日本経済の姿
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日本経済日本経済・・ 日本経済日本経済などの記事に関心のあるあなたへなどの記事に関心のあるあなたへ
64
0 0
revised data
original data
Nominal GDP of Japan; revised data
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2010 2011 2012 2013 2014 2015 2016 2017 2018
(Year)
The Ratio of Job Offers to Applicants, Japan, 2010-2018
(Source) https://www.e-stat.go.jp/Note: Seasonally adjusted. Including part-timer , excluding students.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
Unemployment Rate, Japan, 2010-2018(%)
(Year)
(Source)http://www.stat.go.jp/data/roudou/sokuhou/tsuki/
59.6
69.4
70.7
67.9
56.0
58.0
60.0
62.0
64.0
66.0
68.0
70.0
72.0
2000 2002 2004 2006 2008 2010 2012 2014 2016
(%)
(Year)
Female Labor Force Participation Rate, 2000-2017
Japan United States
(Source) OECD. Stat, LFS by sex and age - indicators
Note: Age 15-64
0
10
20
30
40
50
60
70
80
90
2010 2011 2012 2013 2014 2015 2016 2017
(Trillion yen)
(FY)
Recurring Profits at All Industries, Japan, 2010-2017
(Source)https://www.e-stat.go.jp/dbview?sid=0003060791
Note: Excluding Finance and Insurance. Figure : year end
Supply side is not caching up.
Total Factor Productivity is not rising much.
Demand stimulation was within government (including central bank) reach.
Supply side is not within government reach.
Japanese economy needs more dynamic adjustment in labor market.
Accumulating savings in the pocket of the corporate sector.
-1.50
-1.00
-0.50
0.00
0.50
1.00
1.50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Potential Growth Rate, Japan, 2008-2018
Hours worked Total factor productivity Capital stock Number of employed Potential growth rate
(FY)
(y/y % chg.)
(Source)https://www.boj.or.jp/research/research_data/gap/index.htm/Note: The potential growh rate id estimated by the Research and Statistics Department , Bank of Japan.
-0.9
0.5
1.9
4.7
-8
-6
-4
-2
0
2
4
6
8
10
12
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
(%)
(Year)
Saving Investment Balance (GDP ratio)Corporate Sector, 1990-2017
UK USA Canada Gemany Japan
(Source)OECD (2019), Net lending/borrowing by sector (indicator). doi: 10.1787/693a515e-en (Accessed on 18 February 2019)
0
50
100
150
200
250
300
350
400
450
500
2010 2011 2012 2013 2014 2015 2016 2017
Retained Earnings at All Industries, Japan, 2010-2017(Trillion yen)
(FY)(Source)https://www.e-stat.go.jp/dbview?sid=0003060791
Note: Excluding Finance and Insurance. Figure : year end
Limit of quantitative monetary expansion
• It is difficult to achieve 2 % inflation rate• Credibility of inflation targetting
• Bazooka was effective to change people’s mindset once or twice but no more.
• Very flat yield curve generates difficult business conditions for the banking sector
Optimal speed of fiscal consolidation?
• Primary fiscal balance was chosen as a target for fiscal consolidation• About 0.5 % point reduction of GDP of primary balance deficit of GDP
• Low interest rate makes debt service very low• Will interest rate continue to be low?
• Debt/GDP ratio is expected to start decreasing soon but very slowly
• Mild inflation (with primary balance surplus) is necessary for reducing debt/GDP ratio
• Aging population will impose further burden on fiscal consolidation
-9.0
-8.0
-7.0
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
(%)
(Year)
General Government Net Lending (GDP ratio), Japan, 2010-2108
(Source) OECD.Stat, Economic Outlook No 104 - November 2018.
-9.0
-8.0
-7.0
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
2010 2011 2012 2013 2014 2015 2016 2017 2018
(%)
(Year)
General Government Primary Balance (GDP ratio), Japan, 2010-2018
(Source) OECD.Stat, Economic Outlook No 104 - November 2018.
March 2019
Hiroshi Ohata
Japanese Fiscal Policy and
Public Debt Management
Virtuous cycle
Investment
Wage
Corporate profit
Consumption
Productivity
Enhancing
potential
growth
Supply System
Innovation
Providing grounds to
drive innovation and
to realize ‘Society 5.0’
Human Resources
Development
Revolution
Developing human
resources to create
an inclusive society
Embracing diversity
Overcoming deflation
• The BOJ, together with the government, aims for overcoming deflation as
early as possible. (The BOJ aims at achieving price stability target at 2%.)
Sustainable growth
• Achieving 600 trillion yen
economy
Integrated Economic
and Fiscal Reform
Aiming to achieve a
primary fiscal surplus
by FY2025, and a
stable reduction in the
debt-to-GDP ratio.
Securing
sustainability of social
security system
Economy: Virtuous cycle achieving economic revitalization
Eliminating
concerns
over the
future
Structural reform Fiscal consolidation
1
By FY2025
At the same
time
Achieve a primary surplus of the national and local governments
Fiscal consolidation target
Mechanisms to integrate fiscal consolidation target and annual budget
formulation for FY2019 to FY2021
Measures to realize the plan
Social security
Expenditure
The progress will be reviewed at the midpoint of the new Plan, or FY2021; thereafter the outcome
will be reflected in the subsequent reforms of expenditures and revenues towards the achievement of a
primary surplus by FY2025.
【Benchmarks for managing the progress】・Primary deficit to GDP ratio:around 1.5% ・Public debt to GDP ratio:in the low 180%-range
・Fiscal deficit to GDP ratio:at 3% or below
Non-Social security
Expenditure
Contain the increase within the one corresponding to the increase due to population
aging
Expenditures of the
local government
Steadily reduce the public debt to GDP ratio
Continue the efforts of expenditure reforms thus far in the Abe Cabinet
The total amount of the general revenue shall be maintained substantially at the same
level as in the FY2018 Fiscal Plan of Local Governments, and not below
Main points of the New Plan to Advance Economic and Fiscal Revitalization
(Cabinet Decision on 15 June 2018)
2
Highlights of the Draft FY2019 Budget (1/2)
Shifting toward “Social security that accommodates the needs of all generations”, implementfree early childhood education and enhancement of social security system funded by therevenue raised by the consumption tax hike
Public spending (PS) : +\811.0bn (National government spending (NGS) : +\715.7bn*1 )
• Free Early Childhood Education and Childcare [Starting from Oct.2019] …… PS : +\388.2bn (NGS : +\388.2bn*2)
• Improvement of working condition for long-term care workers [Starting from Oct.2019] ……………… PS : +\ 42.1bn(NGS : +\ 21.3bn)
• Provision of benefits for supporting low-income pensioners ……………… PS : +\185.9bn (NGS : +\185.9bn)
• Further burden reduction of long-term care insurance contributions for the low-income elderly …… PS : +\ 65.4bn(NGS : +\ 32.7bn), etc.
*1,2 These amounts include temporary grants for children and child-rearing (assumed name) amount to \234.9bn along with making whole expenses for the first year of free early childhood education and childcare to be national spending. The amount of increase in social security expenditure for enhancement of social security system excluding the grants is +\480.8bn for public spending, +\153.2bn for national government spending.
Mobilize a range of measures to level the impact on the economy of the consumption tax hike“Temporal and Special Measures” : \2,028.0bn (NGS)
• Point Rewards to Consumers via Small and Medium-sized Retail Businesses, etc. ………………… \ 279.8bn
• Vouchers with premiums for the Low-income or Child-rearing Households ………………………… \ 172.3bn
• Budgetary Measures for Housing Purchaser - Benefits for Housing Purchase “Sumai Kyu-fu kin” ……. \ 78.5bn- Point Reward System for Promoting Innovative Housing …. \ 130.0bn
• Measures for Disaster Prevention, Disaster Mitigation and Building National Resilience ………… \1,347.5bn, etc.
3
Highlights of the Draft FY2019 Budget (2/2)
《Fiscal Consolidation》
Based on “Three-year Emergency Response Plan for Disaster Prevention, Disaster Mitigation,and Building National Resilience”, reflecting “Emergency Inspection of Critical Infrastructure”,etc., implement 160 urgent measures intensively for 3 years until FY2020.
⇒ Utilize FY2019/FY2020 Temporal and Special Measures (FY2019 : 1,347.5bn*3) and the Second Supplementary Budget for FY2018
*3 National Government Spending. The whole spending, including the Second Supplementary Budget for FY2018, amounts to \2.4tn.
By contrast, the size of the projects for 3 years until FY2020 amounts to approx. \7.0tn.
Under “New Plan to Advance Economic and Fiscal revitalization”, continue efforts for expenditure reforms.
• Social Security Expenditures: achieved the principle of suppressing the increase due to aging population (+\477.4bn)
• Non-social security Expenditures: continue efforts for expenditure reforms (+\33.0bn)
The amount of planned bond issuance has decreased in 7 consecutive years since the start of Abe administration. (FY2018:\33.7tn ⇒ FY2019:\32.7tn [\31.9tn])
Primary balance in the general account has improved. (FY2018: -\10.4tn ⇒ FY2019: -\9.2tn [-\8.4tn])
※ [ ] shows the amount excluding the amount of “Temporal and Special Measures”.
4
Impact of the consumption tax hike
Economic impact of this consumption tax hike is estimated to be approx. \2.0tn, suppressedby mitigating measures such as free early childhood education, etc. New measures, amountingto approx. \2.3tn, are prepared enough to overcome this adverse impact.
Impact of the consumption tax hikeBurden
Increase
Burden
Decrease
Increased Burden due to the consumption tax hike as revenue sources
for national and local governments : +\5.7tn (+\2.87tn per 1%) Approx.
\5.7tnー
Implementation of reduced tax rate ー Approx. \1.1tn
Securement of fiscal resources by revision of tobacco and income tax
last year, etc. Approx.
\0.6tnー
Approx.\5.2tn
Increased
Burden
Free Early Childhood Education, Enhancement of Social Security SystemBenefit
Increase
The implementation of Free Early Childhood Education and Childcare from Oct.1, 2019
Provision of benefits for supporting low-income pensioners, etc.Approx. \2.8tn
The compensation to medical fees for increased consumption tax burden, etc. Approx. \0.4tn
Approx. \3.2tn
Benefit
Increase
New measures to address the consumption tax hike Budget size, etc.
Temporal and Special budget measures (Point Rewards, Vouchers with premiums, Benefits for
Housing Purchase “Sumai Kyu-fu kin”, Point Reward System for Promoting Innovative Housing, and Measures
for Disaster Prevention, Disaster Mitigation and Building National Resilience, etc.)
Approx. \2.0tn(National government
spending)
Tax credit (Expansion of housing loan tax credit, Reduction of tax burden on purchase and possession of
automobiles)
Approx. \0.3tn(Tax reduction)
Mitigate
economic impact
amount to
approx. \2.0tn
Measures
amount to
approx.
\2.3tn
Measures
amount to
approx. \2.3tnenough to
overcome this
adverse impact
(Note) Figures are under careful examination.
5
Measures for the Consumption Tax Hike
Presented by Minister of Economic and Fiscal
Policy in the Council on Economic and Fiscal
Policy (CEFP) on 20 December 2018
Changes from
FY2018(initial)
40-Year 2.4 -30-Year 8.4 -20-Year 10.8 -1.210-Year 25.2 -1.25-Year 22.8 -1.22-Year 24.0 -1.2
TBs (1-year) 21.6 -10-Year
inflation-indexed1.6 -
Liquidity enhancementauction
12.6 -
Total 129.4 -4.8
FY2019
Highlights of FY2019 JGB Issuance Plan
〈Breakdown by Financing Methods〉〈Breakdown by Legal Grounds〉 〈Market Issuance Plan by JGB types〉
=
(trillion yen) (trillion yen) (trillion yen)
※ Non-Price Competitive Auction Ⅱ is an additional issuance for the JGB Market Special Participants after the normal auction.
Additional revenue from issuance at a price above par value is also included.
- Market issuance amount by normal auctions : 129.4 trillion yen
(reduced by 4.8 trillion yen in total)
- Issuance amounts by maturity types will be reduced in each zone of super-long-
term, long-term and short- to medium-term in a well-balanced manner, based on
the market needs.
- Issuance through liquidity enhancement auctions (additional issuance of off-the-
run JGBs based on market demand) will remain at the current amount, considering
the market circumstances.
6
Changes from
FY2018(initial)
Newly-issued bonds
(Construction bonds and
special deficit-financing bonds)
Reconstruction bonds 0.9 -0.0
FILP bonds 12.0 -
Refunding bonds 103.1 -0.1
Total 148.7 -1.2
FY2019
32.7 -1.0
Changes fromFY2018(initial)
141.8 -2.3
4.7 1.4
2.2 -0.3
148.7 -1.2
FY2019
BOJ rollover
JGB market issuance
Market issuance bynormal auctions -4.8
Non-price competitiveauction Ⅱ and others 12.4 2.5
Sales for households
129.4
Total
Could Japan Achieve Super Smart Society ?
Japan Securities Summit4 March 2019
Naoko NemotoFinancial EconomistAsian Development Bank Institute
Outlook for Japan’s Economy: Solid capital investment and labor income will sustain growth
2 Source:ADB Asian Development Outlook
Supplement Dec 2018
60
70
80
90
100
110
0
5
10
15
20
25
30
Corporate Profits and Investments
Pretax profit (Trillion yen, left axis)
Capital investment (Trillion yen, right axis)
Source: Cabinet Office Quarterly GDP Estimates
2018, Ministry of Finance Financial Statements
Statistics of Corporations by Industry 2018
Productivity Improvement Key AmidDeclining Population
3Source: Ministry of Internal Affairs and Communications Labor Force Survey 2019
62
63
64
65
66
67
68
2.0
3.0
4.0
5.0
6.0
(Mil. ppl.)(%)Unemployment Rate and the Number of Employed
Unemployment rate Employed (Seasonally adjusted)
Public-Private Cooperation to Advance “Future Growth Plan and Society 5.0”
4
“ Society 5.0” is Aligned with Sustainable Development Goals( SDGs)
5
Source: Federation of Economic Organization
• Japan Future Strategy June 2018 Cabinet Office
August 2018, Ministry of
Economy, Trade and Industry
December 2018, METI
January 2019 Prime Minister
Shinzo Abe
• New era of automobiles
• 80% reduction of GHG
emissions per vehicle
• Published guidance paper with
Task Force on Climate-
Related Financial Disclosure
• Financial Services Agency
supports disclosure
• Aim to reduce hydrogen
production costs by at least
90% by 2050
ESG Investment to Boost Investment Chain, Japan’s Growth Strategy
6
Corporate
Improvement of Corporate Value
Boost Japan’s Potential Growth
Investors
Asset Management Co.
• GPIF*
• Pension fund
• Insurance
• Foreign Investors
• Individuals
Stewardship
Code
Corporate
Governance
Code
High
Returns
Government Pension Investment Fund (GPIF) has integrated ESG factors into the investment process via 1) investment principles, 2)
stewardship principles, and 3) proxy voting principles. GPIF also solicitated ESG indices(e.g. FTSE Blossom Japan Index, S&P/JPX
Carbon Efficient Index Series, MSCI Japan Empowering Women index)
HR Development and Diversity: Smart Society Pillar
7
44
April 2016
• Act on promotion on women’s participation and advancement in the workplace
• Set a goal of increasing women in leadership positions to 30% by 2020
April 2019
• Reform of labor law
• Focus on work style reform (i.e. reduction of overtime work)
April 2019
• Reform of immigration and refugee recognition law to expand foreign workers
• Set up new status of residence
Non-Routine
Routine
Manual Cognitive
Source: Mitsubishi Research Institute (June, 2018)
Share of Labor Force by Type of Work
March 4, 2019
Makoto Sonoda
Director for International Capital Market RegulationDirector for International Accounting
Member of G20 Office
Financial Services Agency
Government of Japan
Japan’s developmentsto attract people and industry
*Any views expressed in this presentation are those of the presenter and are not necessarily the official views of the FSA.
1
Main Topics
Corporate Governance Reform in Japan-highest profile issue under Abenomics-
FSA’s recent developments to attract investors
G20 priorities under Japanese presidency
2
Corporate Governance Reform in Japan-highest profile issue under Abenomics-
3
Current Status of Abenomics
(Source) Prime Minister of Japan and his cabinet Website
Address by Prime Minister Shinzo Abe at NYSE(Sept. 20, 2017)
4
“First of all, we have to change Japan’s corporate culture. Iplace the greatest emphasis on reforms to corporategovernance.
Two years ago, we drew up a corporate governance code.This resulted in the percentage of listed companies withtwo or more independent outside directors rising to 88percent now, up from a mere 17 percent five years ago.”
We will press forward further with corporate governancereforms so that corporations take management decisionsdecisively, with an awareness of the cost of capital.”
(Source) The Website of the Prime Minister and his Cabinet
Opening Address of Chairman Hiroaki Nakanishi, Keidanrenat the Symposium “Toward Realization of Effective Corporate Governance” hosted
by Keidanren (Nov. 12, 2018)
Promotion of Corporate Governance by the Initiatives of the Business Community
“Corporate governance reform among companies should now be implemented by the initiatives of their top management, and corporate governance should be established not merely in form but in effect as well.”
5
0
1
2
3
4
-4% 0% 4% 8% 12% 16%
6
Enhancing Capital Efficiency through Corporate Governance Reform
It is important to enhance productivity and profitability by strengthening corporate governance, etc. in order to maintain the sustainable growth of companies.
The ROE and PBR of companies are increasing as a whole through the progress of corporate governance reform.
0
1
2
3
4
-4% 0% 4% 8% 12% 16%
2014PBR1.4ROE9.7%
2018年PBR1.6ROE11.5%※MedianPBR
ROE
(Source)Edited by FSA from Bloomberg Data:, JPX Nikkei 400 Companies
7
③Audit quality enhancement
Comprehensive Reform of Japan’s Capital Market
Companies
Capital Market
Asset OwnersHousehold
(Asset Managers)Customer-oriented Asset
Management(High quality products &
services)
Diversified & installment investment for long term
②Corporate disclosure reform
The Stewardship Code and the Corporate Governance Code work in tandem for long-term growthin corporate value
Reform of corporate disclosure to support investment judgement and encourage constructive dialogue
Measures ensuring confidence in audits
①Corporate Governance Code
①Stewardship CodeProgress of asset management
Corporate Governance and Stewardship
Engagement Policy and
its Disclosure
- Voting Record Disclosure
- Stewardship Activities
8
Board Governance
- Independent Directors
- Appointment/dismissal of CEO,
Succession Planning
- Nomination/Remuneration
Committees
Cross-shareholdings
ESG
II. StewardshipI. Corporate Governance
Asset Managers
Investment
Asset OwnersReturns
Listed Companies
Investment
Returns
ConstructiveDialogue
15.0% 16.7% 18.0% 21.5%
48.4%
79.7%88.0% 91.3%
97.7%
0%
20%
40%
60%
80%
100%
2011年 2012年 2013年 2014年 2015年 2016年 2017年 2018年 2018年
9
I-1 (1) :Independent Directors
The percentage of companies with two or more independent directors have substantially increased to 91.3% of the 1st Section listed companies as of July 2018, and 97.7% of JPX Nikkei 400 companies.
Companies with two or more independent directors
(Source)Tokyo Stock Exchange
JPX Nikkei400
Companies with one third or more independent directors
6.4%12.2%
22.7%27.2%
33.6%40.6%
0%
10%
20%
30%
40%
50%
2014年 2015年 2016年 2017年 2018年 2018年
市場第一部 JPX日経
400
JPX Nikkei400
The percentage of companies with one third or more independent directors have increased to 33.6 of the 1st Section listed companies as of July 2018, and 40.6% of JPX Nikkei 400 companies.
TSE 1st Section
TSE 1st Section
10
The number of female executives has increased to over 1,700, which is nearly 3 times the number 5 years ago. Currently, they account for 4% of all executives of all listed companies.
Trend in the Number of Female Executives at listed companies
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
0
200
400
600
800
1000
1200
1400
1600
1800
2008.7 2009.7 2010.7 2011.7 2012.7 2013.7 2014.7 2015.7 2016.7 2017.7 2018.7
女性役員数(人) 女性役員数
同比率
(Source)Toyo Keizai Shinpo-sha, “Executives” include directors, statutory auditors and executive officers.
I-1 (2) :Diversity of the Board
Number
Percentage
Number of female
executives
%
11
(Source) Questionnaire Survey Results(2018) of Egon Zehnder
I-1 (3): Appointment/Dismissal Policy of CEO
The percentage of companies for whom the Appointment Policy and Dismissal Policy are “Under Preparation” increased drastically.
The percentage of companies with “No Plan” and no reply reduced substantially.
Ratio(%)
Ratio(%)
12
The percentage of companies with Nomination Committees increased from 11% in 2015 to 34% in 2018.
【 Ratio of 1st Section Companies with Nomination Committees】
【 Ratio of the 1st Section Companies with Remuneration Committees】
I-1 (4): Nomination/Remuneration Committees
The percentage of companies with Remuneration Committees increased from 13% in 2015 to 38% in 2018.
Source: Tokyo Stock Exchange
【Trend in the Percentage of Outside Directors in Nomination Committees】
Voluntary
Legally required
Voluntary
JPX Nikkei 400
Outside Director: Majority
Outside Director: Majority
<Composition of Outside Directors>
All ≧2/3 2/3>X>1/2 1/2≧X≧1/3 1/3>
Source: Tokyo Stock Exchange13
I-1 (5): Effectiveness of Nomination Committees
For around 50% of voluntary Nomination Committees, outside directors account for the majority of members.
Legally required1st Section,
Tokyo Stock Exchange
14
Half of the chairman of nomination committees are independent outside directors.
(Source) Survey results in 2018 by Egon Zehnder
I-1 (6): Chairmen of Nomination Committees
15
I-1 (7): Ratio of Companies with ROE as Management Plan Target
37.7%
41.6%
56.5%58.9%
63.3%
30%
40%
50%
60%
70%
2013 2014 2015 2016 2017
(Source) Survey results of the Life Insurance Association of Japan
Ratio(%)
16
3.7
1.2
3.4
5.7
0
2
4
6
8
10
12
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
上場銀行
損害保険会社
生命保険会社
上場事業法人
(%)
(Source)J-IRIS Research
38.037.1
36.1 35.734.3 34.4
33.432.1
31.2
39.1 39.8 40.3 40.7
44.345.6
46.7
49.551.3
22.8 23.1 23.6 23.6
21.419.9 19.9
18.3 17.515
20
25
30
35
40
45
50
55
2009 2010 2011 2012 2013 2014 2015 2016 2017
安定株主
機関投資家
個人その他
(%)
I-2 (1): Trend for Cross-shareholdings
Shareholder composition of listed companies at Nikkei 225 (Ratio of No. of voting rights)
Ratio of shareholdings by shareholder category (market value basis)
Although the ratio of cross-shareholding shares among voting right shares isdecreasing, it has been pointed out that cross-shareholdings between non-financialcompanies have not been significantly reduced and are still at a considerably high level.
(Source)Nomura Securities
Stable Shareholders
Institutional investors
Individuals and others
Number of companies in which cross-shares are held. Total amount of cross-held shares on the balance sheet
At present
I-2 (2): Plans to revise disclosure of cross-shareholdings (provisional)
30 companies each for current year and preceding year
Changes after revision(tentative)(shown in red characters)
Policy of cross-share holdings, process to verify their rationale for holding them
Total amount of shares for pure investment purpose on the balance sheet, received dividend, profit/loss from disposition of such shares, total amount of market values
Definition of cross-held shares and shares for pure investment purpose
Increase/decrease of number of shares, total amount and reason of increase
Number of companies in which cross-shares are held. Total amount of cross-held shares on the balance sheet
Number of companies held for pure investment purpose. Total amount of shares for pure investment purpose on the balance sheet, received dividend, profit/loss from disposition of such shares, total amount of market value
Company SharesB/S
AmountObjective
of holdings
A xxx,xxx xxx,xxx ・・・・・
B xxx,xxx xxx,xxx ・・・・・
・・・
30com
pan
ies Company
(This year)Shares
B/S Amount
(Last year)Shares
B/S Amount
Objective of holdingsBenefit of holdings
Shares held by counterpartiesReason for increase
Axxx,xxxxxx,xxx
xxx,xxxxxx,xxx
・・・・・・・・・・・・・・・・・・・・・・
Bxxx,xxxxxx,xxx
xxx,xxxxxx,xxx
・・・・・・・・・・・・・・・・・・・・・・
60com
pan
ies
・・・
(Last year)
30 companies each for current year and preceding yearCompany Shares
B/SAmount
Objective of
holdings
A xxx,xxx xxx,xxx ・・・・・
B xxx,xxx xxx,xxx ・・・・・・・・
30com
pan
ies
(This year)
17
Constructive Dialogue
Stewardship Code Corporate Governance Code
・Introduced in Feb. 2014・Revised in May 2017(Asset Owners, Conflicts of interest, Collective Engagement)
Guidance 3-3
When investors monitor investee
companies, a variety of factors may be
considered as relevant. Factors may
include (….), including risks and
opportunity arising from social and
environmental matters(….).
I-3:Corporate Governance Reform and ESG issues
Investors Companies
Investment
Returns
・Introduced in June 2015・Revised in June 2018(Nomination Process of CEO, Gender, International Experience, Cross-shareholdings, etc.)
General Principle 3 [Notes]
(….) non-financial information, such as (….), social and environmental matters(ESG factors) is often boiler-plate.
18
18
86
49
80
個別(理由有り) 個別(理由無し)集計 無し・不明
19
Disclosure of Proxy Voting Results
(Source) by FSA as of Oct. 2018
Over 100 institutional investors including most major domestic investors disclosevoting results of AGM by individual company/agenda basis. Some of them alsodisclose the reasons of “Against” votes.
Reasons of Voting
Investor X
Investor Y
Detailed Descriptione
a
b
c
d
f
II-1 (1): Voting Result Disclosure
Results by agendaCumulating results
Results by agenda + ReasonsNA
II-1 (2): Voting “Against” Policy by investors and voting agencies
(Source) Compiled from the information of each company website by FSA, as of June, 2018 AGM
Mitsubishi UFJ Trust JP Morgan Asset ISS
Number of Outside Directors
・2 or more outside directors are NOT elected・Against all directors
・1/3 or more outside directors are NOT elected ・Against CEO
・2 or more outside directors are NOT elected<On or after Feb. 2019> 1/3 or more outside directors are NOT elected・Against top management(Companies with Kansayaku Board)
Capital Policy
・ROE is less than 5% for 5 consecutive years and recovery is not expected.・Against a representative director・Deficit has continued for last 3 consecutive years and recovery is not expected.・Against directors serving the subject period
・Poor business results out of mismanagement(extremely low profitability such as low ROE)・Against a director who is considered responsible.
・ROE is less than 5% for 5 consecutive years and recovery is not expected.・To vote against election of top management
20
II-1 (3): Stewardship Activity Reports by Institutional Investors
21
The quality of disclosure of stewardship activities varies widely by investor. Thereare some investors which disclose examples of actual engagement, while otherinvestors disclose their activities abstractly, or disclose nothing.
Cases of engagement(Industry・Subjects・Results)
Organization of engagement Analysis of
Engagement
Self Assessment
Number of companies and cases of engagement
Name of the companies which were engaged
The subjects of engagement
Overseas Investor A Japanese Investor B
Japanese Investor C
Cases of proxy voting according to engagement
(Provisional Translation by FSA)
The system of stewardship and evaluation of stewardship activities
We contribute to increase of corporate value and sustainable growth of investee companies through exercising voting rights appropriately in accordance with the voting policy of the company.We review our system of stewardship and the results of stewardship activities of the company and believe that such system and the results are appropriate since we conduct stewardship activities in accordance with our stewardship policy.
We will continue to be in charge of stewardship activities primarily through proxy voting.
<End)
22
II-2 (1): Number of signatories of the Stewardship Code
Number of signatories of the Stewardship Code
1 3 6 6 7 7 7 12 1412 16 17 18 19 19 19 19 18
86122 133 141 145 152 153 163 17219
2121 22 22 22 22
22 22
6
67 7 7 7 6
6 6
7
77 7 7 7 7
7 7
0
50
100
150
200
250
300
May Nov. May Nov. May Nov. Dec. Jul. Dec.
Corporate Pension Public PensionInvestment Management InsuranceTrust Bank Others
229214
239
214207201191
175
127
20182015 2016 20172014
23
II-2 (2): Stewardship Activities of GPIF
GPIF (Government Pension Investment Fund, Asset UnderManagement: $1.5 Trillion) accepted the Stewardship Code in 2014and is actively involved in the Stewardship Activities.
• Signed the Principles for ResponsibleInvestment (PRI) in 2015.
• Conducted interviews with all theassigned asset managers on theirstewardship activities since 2016.
• Established “Business and AssetOwners Forum” and “Global AssetOwners Forum” in 2016.
• Established Stewardship Principlesand Proxy Voting Principles in 2017.
• Requested external asset managersfor the disclosure of proxy votingrecords in 2017.
II-2 (3): Stewardship of Corporate Pension Funds and Support of Mother companies
Stewardship Code Corporate Governance Code
Employees(Beneficiaries of pension funds)
Return
Return
Fund
Asset ManagersMonitoring
Mother Companies
Constructive Dialogue
Return
Investment Investment
Corporate Pension Fund
(Asset Owners)
Support of human resources/operations
24
Aioi Nissay Dowa InsuranceEisaiSecomPanasonicMizuho BankMitsui Sumitomo InsuranceNational Construction Association
Sumitomo Mitsui BankingMitsui Sumitomo Trust BankMUFG BankMitsubishi CorporationMitsubishi UFJ Trust & BankingResona BankNTT
311,256
90,521
パッシブ
(Unit: 100 Mil. Yen)
(Source) GPIF, Annual Report Fiscal Year 2015
Passive Investment Ratio of Domestic Equity Investment at Public Pension Funds
Passive Investment Ratio of Domestic Equity Investment at GPIF
(Source) News Letter on Pension & Investment(Note) As of the end of March 2016, the subject funds consist of 9 public
pension funds including GPIF.
(End of the year)
(77%)
(23%) Passive Investment
Active Investment
60%
70%
80%
90%
100%
2005 2007 2009 2011 2013 2015
Reference A. Roles of Passive Fund
Because passive management provides limited options to sell investeecompanies’ shares, institutional investors should actively take charge ofengagement and voting from a medium- to long-term perspective.
<Stewardship Code Revision Points>
25
26
(1) Institutional Investors Collective Engagement Forum(IICEF)
Source: Institutional Investors Collective Engagement Forum (partially edited by the FSA)
• Pension Fund Association
• Sumitomo Mitsui Asset Management
• Sumitomo Mitsui Trust Bank
• Mitsubishi UFJ Trust & Banking
• Resona Bank
・ 10 major Japanese life insurance companies(Nippon Life, Daiichi Life, Yasuda Meiji Life,
Sumitomo Life, Kanpo Life, Taiyo Life, Daido Life, Fukoku Life, Asahi Life, Mitsui Life)
(2) Life Insurance Company Consortium for Engagement
Reference B. Collective Engagement by Japanese Investors
・ Sent letters to companies on Material Issues on Sustainability of their Business Models and the Disclosure as a subject for engagement.
・ Sent letter s to companies with corporate scandals regarding their disclosure and engagement.・ Sent letters to companies with AGM agenda which received significant number of “against” votes.・ Sent letters to companies which have takeover defense plans.
Source: The Life Insurance Association of Japan
・ Sent letters to 100 companies asking for improvement of corporate governance/shareholder returns.
27
FSA’s recent developments to attract investors
Joint Consultation Scheme by Tokyo Metropolitan Gov. and the FSA
Foreign Financial business operators can use either/both of the two contact points below
-Tokyo Metropolitan Gov.-
-FSA-
Financial One-Stop SupportService
E-mail: [email protected]: +81-3‐6269‐9981
Financial Market Entry Consultation Desk
E-mail: [email protected]:+81-3‐3506-7109
Professional business consultant to process your inquiry
Advice on how to incorporate your business in Tokyo
Living support (introduction of English-speaking hospitals and international schools)
Introduction of capable attorneys and financial aid for consultation
Inquiries regarding registration
procedures and interpretations of
financial regulations
Constant follow-up toward
registration as an authorized
financial business operator
Joint consultation and a variety of support menu for prospective market entrants through close cooperation
Inquiry Support/Advice
The joint consultation service welcomes any inquiry from foreign financial business operators to establish a business base in Tokyo
URL:http://www.bdc-tokyo.org/?cat=3
URL:http://www.fsa.go.jp/en/policy/marketentry/index.html
Setting up an office in Tokyo Registration to the FSA
28
“Fast Entry” ; Financial Market Entry Consultation Desk
FSA launched the "Financial Market Entry Consultation Desk" to give advice on Japan’sfinancial regulations to foreign financial business operators (e.g. asset managementfirms) which plan to establish a business base in Japan.
As the first case, a UK asset management company, Legal & General Group, consultedthe desk and completed the registration procedure in approximately half the timegenerally taken.
Schedule of the Legal & General Group case
Prior Consultation
Registration Process
Approximately half the time generally taken
Approximately 2 months
General Schedule
First Prior Consultation
Completion of the Registration Procedure
Approximately 3~4 months
Approximately 1~2 months
Submission of Registration Application
Approximately 2 weeks
Prior Consultation
Registration Process
Completion of the Registration Procedure
Financial Market Entry Consultation Desk
Website: https://www.fsa.go.jp/en/policy/marketentry/index.html
E-mail: [email protected]:+81-3‐3506-7109
First Prior Consultation
29
G20 priorities under Japanese presidency
30
Where are we in the history of the G20?What are the goals of the Japanese presidency?
31
Monitoring and addressing emerging
risks and vulnerabilities
G20’s First Decade
2008:Global Financial Crisis
More capital and liquidity
• Basel 2.5• Basel III• Basel III
finalization
No more “too big to fail”
• SIFI surcharge• TLAC• RRP• Resolution
regimes
OTC derivatives
• Central clearing• Margin
requirements• Trade
repositories• Trading
platforms
Shadow banking
• Securitization
• Repo-market
• MMF
• Banks’ links to shadow banking
2009:The third G20 Leaders’ summit in PittsburghBlueprint of the post-GFC regulatory reforms
32
Pivoting to implementation and evaluation of effects
End-2017: The post-GFC reform agenda largely completed
The G20 in 2019 and beyond
Full, timely and consistent implementation
Evaluation of effects• Central
clearing• Infrastructure
finance• SME finance• TBTF reforms
Addressing market fragmentation
Technological innovation
• Crypto assets
• Decentralized financial technologies
33
Pivoting to implementation and
evaluation
Financial stability and inclusion in an aging society
2019 Priorities
What would you choose as priorities for 2019 and beyond?
Monitoring and addressing emerging
risks and vulnerabilities
Roadmap to Fukuoka and Osaka
34
January 17 Symposium on demographic changes and macroeconomic challenges Tokyo
January17-18
Deputies’ meetings
April 2 (TBD)
Roundtable on AML/CFT issues relating to financial innovation Washington,
D.C.April 11-12 Ministers’ and Governors’ meetings
June 7 Symposium on aging and financial inclusion Tokyo
June 8 Seminar on financial innovationFukuoka
June 8-9 Ministers’ and Governors’ meetings
June 28-29 Leaders’ summit Osaka
Regulatory and supervisory fragmentation
35
• Inconsistent timing of implementation Staggered implementation of the agreed margin requirements, different rules
for counterparties in the same transaction.
• Inconsistent requirements “Almost the same but not exactly the same” data reporting requirements
across authorities.
• Duplication of regulatory requirements Single market, two rules, two regulators.
• Incompatibilities between home and host requirements “Don’t tell others in advance” vs “Tell us in advance” “Have a single parent entity in the host jurisdiction” vs “Separate sector-by-
sector reporting lines” “Install consolidated control” vs. “Keep data local”
• Competition for resources or activities Ring fencing CCP location policy
Market fragmentation
36
• Leaders’ declaration in Buenos Aires: “We will . . . through continued regulatory and supervisory cooperation, address fragmentation.”
• Focus on cross-border market fragmentation caused by regulation and supervision.
• Not about unwinding reforms.
• Market fragmentation is a matter of degree, not a bimodal question.
• Some of the fragmentations are intended.
• Full harmonization is not desirable or possible. Regulation and supervision reflect domestic policy priorities, developmental
stages, culture, available resources, etc. Banks are global in life and national in death.
-> Preventing unintended cross-border market fragmentationby processes and approaches for regulators, supervisors and international standard setting bodies
Technological innovation
Crypto-assets
Crypto assets are borderless by nature.
Can national regulators effectively address the challenges?
• AML/CFT
• Directory
• Platforms
Decentralized financial technologies
Public authorities have overseen financial systems mainly by regulating and supervising intermediaries.
How will they oversee financial systems where decision making and responsibilities are distributed among diverse stakeholders?
37
Aging and financial stability/inclusion
38
• Globally, two billion people will be 60 or over by 2050.
• In Japan, there will be half a million people over 100.
• Globally, there will be 130 million people with dementia in 2050.
• In Japan, about 200 trillion yen will be held by those with dementia in 2030.
There will be an estimated retirement savings gap of US$400 trillion by 2050 for these eight countries alone.
Thank you for your attention!!
39
Progress on Corporate
Governance Reform in Japan
Koichiro Miyahara
President & CEO
Tokyo Stock Exchange, Inc.
© 2019 JAPAN EXCHANGE GROUP, Inc. All Rights Reserved.
4 March 2019
© 2019 Japan Exchange Group, Inc.
7,000
10,000
13,000
16,000
19,000
22,000
25,000
0
1
2
3
4
5
6
2012/1
2
2013/2
2013/4
2013/6
2013/8
2013/1
0
2013/1
2
2014/2
2014/4
2014/6
2014/8
2014/1
0
2014/1
2
2015/2
2015/4
2015/6
2015/8
2015/1
0
2015/1
2
2016/2
2016/4
2016/6
2016/8
2016/1
0
2016/1
2
2017/2
2017/4
2017/6
2017/8
2017/1
0
2017/1
2
2018/2
2018/4
2018/6
2018/8
2018/1
0
2018/1
2
Nikkei 225
(JPY)
Trading Value(JPY tril.)
系列2 系列1
Jan. 2018
Nikkei 225 reaches JPY24,000 for the first time in about 26 years
(Source: Bloomberg)
2
Dec. 2012
2nd Abe Administration is established
Nov. 2016
Republican candidate Donald Trump wins U.S. presidential elections
Jun. 2016
Leavers edgeUK Brexit vote
Apr. 2013
BOJ begins quantitative and qualitative monetary easing
TSE 1st Section Trading Value Nikkei 225 (closing price)
(22 Feb. close)
*Data from 16 Dec. 2012 to 19 Dec. 2019
Stock Price and Trading Value
21,425.51
© 2019 Japan Exchange Group, Inc.
Abenomics and Japan’s Stock Market
3
On the back of corporate governance reform and weakened yen, Japanese companies have
increased their earning power and improved shareholder returns.
10.4%22 Feb. 2019
ROEAverage of Nikkei 225 stocks
4.9%2009-12 Avg.
JPY 14.1 tril.FY2018 (forecast)
Dividend Payout1st Section
JPY 6.8 tril.FY2012
(Source: Bloomberg)
JPY 6.5 tril.FY2018*
Share BuybacksAll listed companies
JPY 2.2 tril.FY2012
JPY 590 tril.End of Jan. 2019
Market Capitalization1st Section
JPY 296 tril.End of Dec. 2012
(Source: Tokyo Stock Exchange)
Stock PriceNikkei 225 (closing price)
JPY 10,23026 Dec. 2012
(Source: Nikkei)
(Source: SMBC Nikko Securities *Dec. 2018)
JPY 21,425 22 Feb. 2019
(Source: SMBC Nikko Securities/I-N Information Systems)
+JPY 11,195(2.1 times)
+ JPY 294 tril.(2.0 times)
+5.5%(2.1 times)
+ JPY 7.3 tril.(2.1 times)
+JPY 4.3 tril.(3.0 times)
Independent Outside Directors(at least two, of 1st Section)
(Source: Tokyo Stock Exchange)
16.7%2012
91.3%Jul. 2018
+74.6%(5.5 times)
*As of 13 Feb. 2019
© 2019 Japan Exchange Group, Inc.
Growing Number of Independent Outside Directors
4
Ratio of listed companies that appoint at least two independent outside directors
1st Section: 91.3%
JPX-Nikkei Index 400: 97.7%
Ratio of listed companies whose independent outside directors
occupy at least one-third of its board of directors
1st Section: 33.6%
JPX-Nikkei Index 400: 40.6%
Ratio of Independent Outside Directors (1st Section)
At least one-third of board of directorsAt least two
JPX-Nikkei Index 400 selection criteria considers governance matters, such as one-third independent board representation.
2011 2014 2015 2016 2017 2018 2018 2014 2015 2016 2017 2018 20182012 2013
1st SectionJPX-Nikkei
400 JPX-Nikkei
400
1st Section
(Ref.)
(Ref.)
(Source) “Appointment of Independent Directors, Establishment of Nomination and Remuneration Committees,
and Disclosure of Sodanyaku, Komon etc. (i.e. Former President/CEOs Holding Advisory Positions) by TSE-Listed Companies” published by TSE (Jul. 2018)
© 2019 Japan Exchange Group, Inc.
More Companies with Nomination and Compensation Committees
5
Ratio of listed companies that establish a nomination committee (statutory/voluntary)
1st Section: 34.3%
JPX-Nikkei Index 400: 61.2%
Ratio of listed companies that establish a compensation committee (statutory/voluntary)
1st Section: 37.7%
JPX-Nikkei Index 400: 63.7%
1st SectionJPX-Nikkei
400
2015 2016 2017 20182018 2015 2016 2017 2018 2018
1st Section JPX-Nikkei
400
Voluntary Statutory
(Ref.)
Companies with Nomination Committee (1st Section) Companies with Compensation Committee (1st Section)
(Ref.)
Statutory Voluntary
(Source) “Appointment of Independent Directors, Establishment of Nomination and Remuneration Committees, and Disclosure of Sodanyaku, Komon etc. (i.e. Former President/CEOs Holding Advisory Positions) by TSE-Listed Companies” published by TSE (Jul. 2018)
© 2019 Japan Exchange Group, Inc. 6
• Accurately identify the company’s capital cost
• Bold business decisions, such as reviewing the business portfolio
1. Management decisions that respond to
changes in business environment
• Make strategic investments in systems and other fixed assets, R&D,
and human resources in accordance with plans
2. Policies regarding investment
strategies and financial management
• Establish objective, timely, and transparent process for
CEO appointment/dismissal3. (1) CEO appointment/dismissal
• Secure board diversity in terms of knowledge, expertise, international
experience, and gender to allow it to fulfill its intended role3. (2) Fulfilment of board functions
• Review the purpose of cross-shareholdings as well as their benefits and risks,
disclose them, and clarify policy on unwinding cross-shareholdings4. Cross-shareholdings
• Take and disclose measures such as plans for hiring and assigning suitably
qualified persons for management of corporate pension funds5. Asset owners
Issues regarding Corporate Governance Reform
Summary of Revisions to Japan’s Corporate Governance Code
(Source: Prepared by TSE based on FSA material)
Revisions to Japan’s Corporate Governance Code (1 Jun. 2018)
© 2019 Japan Exchange Group, Inc. 7
Dec. 2017: Joined the Sustainable Stock Exchanges (SSE) initiative.
Jul. 2018: Established the Sustainability Committee, led by Group CEO Akira Kiyota.
Oct. 2018: Expressed support for the Task Force on Climate-related Financial Disclosures (TCFD)
led by the Financial Stability Board (FSB)
Under Japan’s Corporate Governance Code, listed companies are asked to proactively pursue initiatives to provide ESG and other non-financial information.
Listed companies are asked to disclose environmental conservation and CRS activities, as well as initiatives toward appointing female executives in their corporate governance reports.
JPX collaborates with the Ministry of Economy, Trade and Industry to select :
Nadeshiko Brand Stocks for female empowerment (since FY2012)
and Health and Productivity Stock Selection (since FY2015).
ETFs
Infrastructure Funds
Bond Products for Professional Investors
Stock Price Indices
JPX’s Initiatives for ESG Matters
Supporting listed company initiatives toward ESG
Providing ESG-related products to investors
© 2019 Japan Exchange Group, Inc.
JPX Expressed Support for TCFD on 29 Oct. 2018
8
On 5 November 2018, JPX welcomed Mark Carney, Governor of the Bank of England and Chair of the Financial Stability Board (FSB), for a discussion on promoting the TCFD.
© 2019 Japan Exchange Group, Inc.
Current stock market divisions open to the public retain the same structure as those before the integration of TSE and OSE cash equity markets in 2013.
1st Section (2,130 cos.)for companies with high liquidity
→ Five years have passed since market integration, and it has become more evident that the market structure should be improved.
→ Deliberate on (1) to (3), considering the characteristics of companies listed in each market division and the current tiered structure.
(In-depth deliberations are being conducted by the Advisory Group to Review TSE Cash Equity Market Structure established in October 2018.)
Note: Figures for each market division are as of the end of Dec. 2018.
JASDAQStandard (689 cos.)
for SMEs
JASDAQGrowth (37 cos.)
for emerging companies
Delisting
Market transfer
(1) Ideal entry-level market
*2nd Section,Mothers, andJASDAQ
(3) Ideal market transfer / market exit
(2) Ideal step-up market*1st Section
Mothers(276 cos.)for emerging companies
2nd Section(494 cos.)for established
companies
Market for a variety of companies (established / emerging companies)
9
Current Structure of Stock Market