US, Decided to Withdraw from Japan Economy?

According to Japanese Press on August 14, NASDAQ which started ‘Nasdaq Japan’, the stock market specialized in ventures with Son Jeong-Eu, the president of SoftBank will withdraw from Japan. Nasdaq will officially announce the withdrawal policy by sending the officials of Nasdaq on August 20.

Accordingly, Nasdaq Japan will be liquidated. Then, it will change its name into ‘Japan NewMarket’ and maintain the stock transactions. Nasdaq already decided to break off a connection as it settles a full amount of JPY 2.4 billion for investments or loan as a loss in the settlement of April to June.

There are currently 98 companies listed such as Starbucks, e-trade and Morning star. The daily trading volume of Nasdaq Japan decreases by 75% over the opening of 2000.

Nasdaq decided to withdraw from Japan owing to the business aggravation of Nasdaq, excess restriction of the Japanese government and negative attitude of the Japanese securities industry for the construction of new transaction system.

US Nasdaq index slumped by 74% over the highest points of March 2000. As the trading volume has largely decreased, the Nasdaq net income of the first quarter decreased by 55% over the same period of the last year. Nasdaq not only decided to withdraw from Japan due to the business aggravation but also postponed the integration with EASDAQ which is the European stocks network. Also, it canceled the acquisition plan of London Stock Exchange and Frankfurter Stock Exchange. The excess restriction of the Japanese government on the stock trading causes the decision of the withdrawal. As the commercial law of Japan restricts the issued stocks of the company to be in proportion to the limits of illiquid assets, the service companies listed in ‘Nasdaq Japan’ brought complaints which can not trade with large stocks.

Nasdaq has promoted to introduce 24 hours trading system which connects the Nasdaq market of US, Europe and Japan with ‘Nasdaq Japan’. However, as the Japanese securities industry shows the negative viewpoint on ‘there is no effect in introducing the system, Nasdaq decided to withdraw from Japan.

Merrill Lynch Securities reduced the nationwide 28 branches into 8 branches owing to the decrease of the Japanese stock market, and then integrated 3 branches of Tokyo, Osaka and Fukuoka last month. Foreign companies started to turn their bank on the Japanese market.

Also, as the bankrupted companies have increased in number after a bubble collapse, there are many companies or properties that can be sold at the low price. However, the analysis says that it cannot attract the interest of foreign companies or investors.

Young-Ee Lee yes202@donga.com mickey@donga.com