CME to Launch Tokyo Stock Price Index Futures in February

The implementation of TOPIX futures onto CME will provide increased exposure for global investors to Japanese equity markets.

The Chicago Mercantile Exchange, in collaboration with Japan Exchange Group (JPX), has announced the incorporation of Japanese yen-denominated Tokyo Stock Price Index (TOPIX) futures contracts. Assuming the approval of regulatory filings and processes, the futures contracts are expected to be available for trading on CME Globex on February 5, 2018.

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The decision addition will provide global investors located outside of Japan with access to the index. The valuation of TOPIX is calculated based on a combination of all common stock listed on the First Section of TSE, and the JPX cash market. Institutional investors in Japan often refer to TOPIX as a benchmark of the conditions and sentiment surrounding the Japanese equity markets.

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CME Group Chief Executive Officer Terry Duffy commented on the announcement: “International investors turn to CME Group to manage their equity index risk, and we are pleased to provide them with access to another strong, global benchmark: TOPIX… CME Group is now the only derivatives marketplace outside of Japan to offer futures based on the two main Japanese equity indices, Nikkei and TOPIX, which provide opportunities for customers who need to hedge or seek greater exposure to the Japanese equity markets.”

Moreover, Akira Kiyota, JPX Chief Executive Officer, also addressed the decision: “Trading TOPIX futures on both CME and Osaka Exchange, the derivatives market of JPX, offers international investors the opportunity to take advantage of greater liquidity and more efficient price discovery… We look forward to growing our markets together with CME Group and driving global visibility for TOPIX as a benchmark.”

CME has been in the news lately, in relation to launching Bitcoin futures in early December of last year, symbolizing the first step of Wall Street’s acceptance of cryptocurrencies. More recently, rumors surrounding expansionary moves to incorporate additional digital currencies have created even more buzz in the crypto community. While the decision has not been finalized, it appears that the CME and CBOE are each contemplating adding Ethereum and Litecoin futures as well.

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