-- Increasing Convenience and Competitiveness of Japanese Electricity Market
Japan Electric Power Exchange “JEPX” and Japan Exchange Group, Inc. “JPX” have decided to enhance their cooperation in the development and efficient operation of both markets, and to achieve their shared goal of realizing fair and orderly markets. JEPX and JPX signed a Memorandum of Understanding (MoU) on January 19, to collaborate and share information in order to increase both the convenience and the competitiveness of the Japanese electricity market.
Exchange heads shake hands at the MoU signing ceremony
(JPX CEO Kiyota on the left, and JEPX Chairman Kanemoto on the right)
The two exchanges will engage in initiatives that will improve the efficiency of market operations and to provide more valuable services to participants in both markets through enhanced cooperation between JEPX, which operates the electricity spot market, and JPX Group, which operates an electricity futures market.
In 2022, fluctuations in electricity prices intensified due to several factors, such as rising fuel prices caused by the Russian invasion of Ukraine, and concerns about power supply shortages during the summer and winter. Under these circumstances, the role of the market to ensure a stable power supply combined with the futures market’s ability to hedge price fluctuation risks have become even more critical.
TOCOM Electricity Futures were listed on a trial basis on the Tokyo Commodity Exchange (part of JPX group) in September 2019 and had its status changed to a permanent listing in April 2022. As more people start using electricity futures as a tool to hedge electricity price fluctuation risk, the trading volume and the number of market participants are increasing yearly.
JEPX Chairman of the Board of Directors Kanemoto Yoshitsugu made the following comments: The spot and futures markets are two sides of a same coin. With this MoU, I anticipate that the further development of our cooperation will move forward smoothly.
JPX Director & Representative Executive Officer, Group CEO Kiyota Akira commented as follows: We will work together to create synergies for both exchanges and contribute to the development of the Japanese energy market.
*Trading volume includes final settlement
*Number of market participants is as of end of December each year