Page 23 - Bullion World Volume 3 Issue 12 December 2023

including precious metals, from TOCOM to OSE in
2020. JPX is an exchange group that, together with its
subsidiaries Tokyo Stock Exchange (TSE), OSE, TOCOM
and Japan Securities Clearing Corporation (JSCC),
offers a comprehensive range of services, including
market operations, self-regulation and clearing services,
making it a one-stop shop for a diverse range of
products from cash equities to financial and commodity
derivatives. OSE, the derivatives arm of JPX, has been
a provider of financial futures and options such as the
Nikkei 225, and the recent product transfer has led to an
expansion into commodities trading alongside financial
derivatives.

Precious metals market under OSE
With OSE in charge of operations, the precious metals
market has seen several developments. Firstly, there
has been an influx of financial players into the market.
Given gold's role as a safe-haven asset in times of
economic uncertainty, financial players often use it in
their portfolios, a trend that has also been observed
in the OSE market. Global investors continue to
expand their transactions in the OSE gold, while some
trading participants are considering obtaining the OSE
commodity qualification to access the market. Second,
OSE introduced holiday trading in September 2022,
which has been well received by market participants,
leading to a broadening of the user base. The demand
for trading outside Japan's regular business hours is
particularly high among retail and global traders. In the
case of the OSE gold, the period of increased liquidity
often coincides with the opening of the US market, which
in Japan corresponds to the overnight hours, a time
often marked by the release of news on geopolitical and
economic events that affect prices. The introduction of
holiday trading, which allows products to be traded on
Japanese public holidays, is an important milestone that
goes a step further in meeting these needs. So far, the
volume of gold traded on holidays has been much higher
than we had expected, at just under 50% of weekday
volume, and was particularly strong during the Golden
Week holiday in May, one of the longest holiday periods
in Japan.

Overview of OSE precious metals market
The OSE precious metals market comprises gold, silver,
platinum, and palladium. Notably, gold is one of the
world’s largest markets open to global investors, and
platinum ranks second in terms of volume, underscoring
its significance in the global precious metals futures
market.