Tokyo Stock Exchange
There was a time when the Tokyo Stock Exchange was the most important in the world; those days have pretty clearly passed. It is still an important one no doubt but the days when it was the largest in the world are in the past. It is far more likely that they will continue to lose ground to other stock exchanges as countries like China become more and more important players in the global economy.
The Tokyo Stock Exchange is one of the oldest in Asia having been founded in 1878. Over the years it has gone through a number of changes. During the Second World War all of the exchanges in Japan were merged into one that operated until the war ended. Following the surrender the Tokyo Stock Exchange was recreated and chosen to be the main stock market as part of the plan to rebuild the nation's economy. As a result of this it quickly grew to become one of the largest stock exchanges in the world, something that continues to this day.
The rapid growth of the Japanese economy meant that for a time the Tokyo Stock Exchange was the most important in the world. During the eighties it was actually significantly larger than the New York Stock Exchange in terms of market capitalization. Since then the value has fallen pretty dramatically as the Japanese Economy has taken a real hit. This of course has resulted in a large decline in the value of the stocks. There were a lot of reasons for this loss of value but as it currently stands it looks very unlikely that the TSE will ever regain its place as the top stock exchange.
Part of the problem that the Tokyo Stock Exchange faces is the massive growth of China. This has started to result in a lot of businesses moving to stock markets in China so that they can take advantage of the growth. The result is that the Shanghai Stock Exchange is now the fastest growing in the world and a lot of that growth has come at the expense of the TSE. Since China will inevitably surpass Japan as the most important economy in Asia this is likely to continue in the future.
One of the other challenges that the Tokyo Stock Exchange has faced in recent years is a technology program. Like most exchanges they have been making an effort to upgrade their technology so that they can improve the way trades are made. Unfortunately there have been some major flaws with some of the technology that they have introduced which has resulted in a number of trading errors. This has cost both the exchange and investors a lot of money and it has really hurt the reputation of the exchange as they have had a hard time dealing with the errors.