COMMODITY ETFS IN THE JAPANESE STOCK EXCHANGES
AbstractThis 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.
The Copyright Transfer Form to ASERS Publishing (The Publisher)
This form refers to the manuscript, which an author(s) was accepted for publication and was signed by all the authors.
The undersigned Author(s) of the above-mentioned Paper here transfer any and all copyright-rights in and to The Paper to The Publisher. The Author(s) warrants that The Paper is based on their original work and that the undersigned has the power and authority to make and execute this assignment. It is the author's responsibility to obtain written permission to quote material that has been previously published in any form. The Publisher recognizes the retained rights noted below and grants to the above authors and employers for whom the work performed royalty-free permission to reuse their materials below. Authors may reuse all or portions of the above Paper in other works, excepting the publication of the paper in the same form. Authors may reproduce or authorize others to reproduce the above Paper for the Author's personal use or for internal company use, provided that the source and The Publisher copyright notice are mentioned, that the copies are not used in any way that implies The Publisher endorsement of a product or service of an employer, and that the copies are not offered for sale as such. Authors are permitted to grant third party requests for reprinting, republishing or other types of reuse. The Authors may make limited distribution of all or portions of the above Paper prior to publication if they inform The Publisher of the nature and extent of such limited distribution prior there to. Authors retain all proprietary rights in any process, procedure, or article of manufacture described in The Paper. This agreement becomes null and void if and only if the above paper is not accepted and published by The Publisher, or is with drawn by the author(s) before acceptance by the Publisher.