COMMODITY ETFS IN THE JAPANESE STOCK EXCHANGES

  • Nobuyoshi Yamori

Abstract

This paper analyzes commodity investment trusts and commodity ETFs as a method for investing in
commodities, which are expected to be an important tool for individual investors to participate in commodity
investments. The “Financial Big Bang” reforms during the latter half of the 1990s substantially transformed the
Japanese financial system, which had been strictly regulated. Recently, thanks to financial deregulation, there are
30 commodity ETFs listed on the Tokyo Stock Exchange or the Osaka Securities Exchange. However, this paper
finds that most of commodities ETFs are thinly traded. So, we need to implement further policy as soon as
possible in order to encourage Japanese investors to participate in the commodity ETF market. Otherwise,
investors will lose their interests in Japanese commodity ETF markets. Finally, this paper investigates whether
new commodity ETFs compete against traditional commodity future markets. The paper finds that growing
commodity ETFs increase transactions in traditional commodity futures markets, such as the Tokyo Commodity
Exchange. Encouraging more commodity ETFs transaction may lead to active arbitrages between ETFs markets
and commodity future markets. In sum, our results suggest that commodity ETFs are beneficial to traditional
commodity future markets.
Published
2011-08-15
How to Cite
YAMORI, Nobuyoshi . COMMODITY ETFS IN THE JAPANESE STOCK EXCHANGES. Journal of Advanced Studies in Finance, [S.l.], v. 2, n. 1, p. 47-52, aug. 2011. ISSN 2068-8393. Available at: <https://journals.aserspublishing.eu/jasf/article/view/45>. Date accessed: 22 jan. 2022.
Section
Journal of Advanced Studies in Finance