By Itsuki Okuda / Yomiuri Shimbun Staff Writer
Tokyo Stock Exchange Inc. is on a mission to promote "management that is conscious of cost of capital," President and CEO Ryusuke Yokoyama said during an interview with The Yomiuri Shimbun and other media outlets.
In 2023, the TSE, which operates under Japan Exchange Group Inc., requested all companies listed on the Prime Market and Standard Market to work to implement "management that is conscious of cost of capital and stock price." Since then, it has been calling on companies to analyze metrics such as stock prices, price-to-book ratio $(PBR)$ and return on equity $(ROE)$ at board meetings and work to improve them.
Yokoyama, who became president and CEO earlier this month, acknowledged that there had been a series of hasty shareholder returns aimed at boosting ROE, saying, "We placed too much emphasis on (improving) ROE, and that is something we may need to review."
The following is excerpted from the interview.
Question: What challenges is the TSE facing?
Ryusuke Yokoyama: Three years have passed since we requested (companies implement) management that is conscious of cost of capital and stock price. If we consider it as positive that investment capital, both domestic and international, is flowing toward the exchange and the Japanese market, then some progress has definitely been made. We placed too much emphasis on ROE, and that is something we may need to review.
Figuring out how to improve on this point, or build upon this, is our main mission in the second phase. Listed companies each have discussed matters with an awareness of cost of capital and disclosed certain approaches to investors. However, it is meaningless (if these processes are just) mere formalities. We will seek substantive disclosures that lead to enhanced corporate value. Our main goal will be to improve quality.
Question: A wave of new technology is also sweeping through the capital markets. What is your view on this?
Yokoyama: Market volatility has risen significantly in recent years. Price fluctuations, the number of orders and executions, trading volume and other (indicators) have all reached significantly high levels. The number of orders, which is important in terms of systems, has recently exceeded 300 million per day. It is not easy to operate the market stably. We intend to provide a stable and resilient system and plan to even use artificial intelligence.
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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April 17, 2026 07:35 ET (11:35 GMT)
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