Nippon Dispatches: Day Four

After a full week in Tokyo, I managed to speak with Yoshinori Suzuki, the executive vice president and CIO of the Tokyo Stock Exchange (TSE) and  Yuchi Fukui, executive officer at the Tokyo Commodities Exchange (Tocom).

Up until today, most of my meetings have been with the typical group of cosmopolitan expatriots who usually man the capital markets around the globe. They might spend a few years in Tokyo before leaving for Wall Street or Canary Wharf.

Speaking with Sukui-san and Fukui-san, I'm beginning to see the challenges facing the Japanese markets. It's not strictly a matter of lowering the message latency of their respective trading platforms—which is enough of a challenge for any well-seasoned technologist—it is more about how to harmonize the Japanese domestic market with the various global markets. Without harmony with the other markets, it will be difficult to attract foreign investment into the capital markets.

Strictly speaking, this is not a specific issue for technologists. It belongs to the board of directors and CEOs of the respective organizations, as well as the various Japanese regulators. Once the regulators and the leadership in the exchanges develop the new vision, the technologists can begin executing that vision.

In the meantime, the industry patiently waits for the regulators to define the new rules in such granularity that will allow firms to commence their implementation.

This will be my last dispatch from Tokyo this trip. Look for a number of stories in the coming days on the current trends and issues facing the local Japanese markets.