Japan Exchange Group, Inc.
8697・Prime Market・Other Financing Business
Business
Japan Exchange Group, Inc. is a financial instruments exchange holding company established in 2013 through the merger of Tokyo Stock Exchange Group and Osaka Securities Exchange. With 7 consolidated subsidiaries and 3 equity-method affiliates, it provides an integrated suite of services related to Japan's capital markets, spanning listing acceptance for securities and derivatives, provision of trading venues, Clearing & Settlement Services, and Information & Index Services. Its main customers are domestic and overseas institutional investors, securities firms and other trading participants, listed companies, and information vendors, and it has established a firm position as Japan's only comprehensive exchange group encompassing the Cash Market (Equities, ETFs, REITs, etc.), the Derivatives Market (Index Futures, JGB Futures, etc.), and commodity futures markets.
Business Model
Operating revenue consists of six categories: trading-related revenue (trading fees linked to trading value and volume, etc.), clearing-related revenue (obligation assumption fees), listing-related revenue (annual listing fees linked to market capitalization, etc.), information-related revenue (market information fees and index business), and system-related revenue (arrownet usage fees and co-location fees). By combining variable revenue linked to market trading volume with fixed revenue based on market capitalization and contracts, the company achieves both revenue stability and scalability during periods of market activity. In FY2026 (ending March 2026), the operating margin reaches a highly profitable 58.4%.
Company Strengths
As a financial instruments exchange holding company under the Financial Instruments and Exchange Act, it is Japan's only comprehensive exchange group operating cash, derivatives, and commodity futures markets in an integrated manner. It has established a structure that aggregates massive domestic and overseas supply and demand through trading participants such as securities companies, and building alternative infrastructure faces a triple barrier to entry consisting of legal licensing, systems, and liquidity.
In FY2026 (ending March 2026), operating profit reached ¥116,289 million (operating margin of 58.4%), and ROE achieved 23.1%, attaining in its first year the Medium-Term Management Plan 2027 financial target of "ROE of 20.0% or above for three consecutive fiscal years." Operating cash flow amounted to ¥107,749 million, and under a dividend payout ratio policy of 60% or more, the company paid dividends of ¥56,087 million while concurrently conducting share buybacks of ¥20,520 million.
The group develops and operates in-house the cash market trading system "arrowhead" and the derivatives market system "J-GATE," ensuring high speed, reliability, and scalability. System maintenance and operation costs are kept at a low level of ¥20,832 million relative to the scale of revenue, while co-location service usage fees continue to expand, rising 9.9% year on year to ¥6,480 million. In November 2024, the company also extended trading hours in the cash market.
ENVALITH's Perspective
Performance Trend
Financial performance has shown three consecutive years of revenue and profit growth since bottoming out in FY2023 (ended March 2023), with FY2026 (ending March 2026) updating record highs: operating revenue of ¥199,051 million, operating profit of ¥116,289 million, and profit attributable to owners of parent of ¥79,139 million. Externally, a sharp surge in trading value on domestic and overseas equity markets (cash trading fees up 28.2% year on year) and rapid expansion of clearing-related revenue (up 57.5% year on year) were the main drivers. Profitability metrics also improved significantly, with the operating margin at 58.5% (versus 55.6% in the prior period) and ROE at 23.1% (versus 18.3% in the prior period). On the other hand, the forecast for FY2027 (ending March 2027) points to a slight decline in profit, suggesting that the high level achieved in FY2026 (ending March 2026) was to a large extent dependent on favorable market conditions.
Growth Strategy
Under the 'Medium-Term Management Plan 2027', pursuing sustainable growth through platform diversification and digital innovation
Promoting the enhancement of functions as a comprehensive exchange spanning cash, derivatives, and commodities. Through the expansion of interest rate-related products and the revitalization of the Derivatives Market (Index Futures, JGB Futures, etc.), the aim is to diversify trading-related revenue and expand market participants.
Continuing to expand information-related revenue (¥33,669 million in FY2026 (ending March 2026), up 5.5% year on year), centered on market information fees and the index business. Digitalization and value enhancement of data services will further strengthen the stable revenue base.
Co-location service usage fees expanded to ¥6,480 million, up 9.9% year on year. Combined with arrownet usage fees (¥3,638 million), System-Related Services revenue (¥13,838 million) continues to grow, strengthening connections with trading participants and information vendors.
Targeting a payout ratio of 60% or higher, with 79.4% (annual dividend of ¥61) implemented in FY2026 (ending March 2026). On April 28, 2026, a resolution was passed for share buybacks with an upper limit of ¥20.0 billion and 40 million shares. Continuing to improve capital efficiency based on the capital policy of Medium-Term Management Plan 2027.
Last updated: July 19, 2026