TT Connects with Takashi Ishizaki, Representative Director, President at TOCOM
Geopolitical tensions, shifting global trade dynamics and uncertainty across energy markets have kept volatility high and made the trading environment increasingly challenging. Yet the Japanese power market continues to evolve and grow.
At the center of this ecosystem is the Tokyo Commodity Exchange (TOCOM), which plays a critical role in supporting the development of Japan’s exchange-traded power futures market.
With deep roots in Japan’s financial and commodity markets, TOCOM provides a marketplace designed around the needs of domestic participants while expanding its appeal to a broader community of energy traders.
To better understand the opportunities and challenges facing Japan’s power futures market, we spoke with Takashi Ishizaki, Representative Director, President at TOCOM, about market growth, liquidity initiatives, technology adoption and the future of energy trading in Japan.
How would you assess the current market momentum and TOCOM’s position within Japan Exchange Group (JPX)?
Japan fully liberalized its retail electricity market in 2016, prompting the entry of more than 800 new retailers and an expansion of spot trading. TOCOM launched its power futures market in September 2019 with 13 participants as a tool for hedging spot price volatility. The market now has 202 participants.
The price spikes caused by the 2021 winter liquefied natural gas (LNG) shortage and the war in Ukraine in 2022 highlighted the importance of hedging. TOCOM’s strength is its broad domestic base, including major utilities, large retailers and independent retailers, alongside growing interest from corporate power users.
Market access has also expanded. MUFG Bank joined in 2024, followed by The Hokuriku Bank in March 2026 and ABN AMRO Clearing Tokyo in September 2026. Domestic participants currently account for about 70% of trading volume, while overseas participants account for the remaining 30%. Access to the TOCOM market has historically been limited for overseas traders, but we expect ABN AMRO’s participation to broaden that access and drive further growth in international trading activity and market liquidity.
How does TOCOM differentiate itself from the European Energy Exchange (EEX) in Japan’s power futures market through its domestic market expertise?
TOCOM enables participants to trade and clear entirely in Japanese yen under Japan’s regulatory regime, supported by Japan Securities Clearing Corporation (JSCC)’s world-class risk management framework.
At the end of August, we launched a new version of JJ-Link, connecting TOCOM futures with the Japan Electric Power Exchange (JEPX) spot market so that power companies trading on TOCOM can procure physical power through JEPX. It is similar to futures-to-spot arrangements used overseas.
The government is considering introducing a quantitative supply obligation that would require retailers to secure 50% of their power supply three years in advance of delivery and 70% one year in advance. It is also considering the establishment of a medium- to long-term trading market in 2028. We expect these reforms to increase demand for longer-term hedging through TOCOM power futures.
As the Japanese power market has matured, risk management and price hedging have become critical. What specific initiatives are you pursuing to boost liquidity and attract more participants?
First, we are offering a 50% discount on trading and clearing fees to encourage hedging, attract new participants, and increase trading volume.
Second, we are broadening the participant base. A seminar jointly hosted with The Hokuriku Bank in Toyama in May attracted about 300 companies. We see significant untapped demand for power price risk management among manufacturers, retailers and service companies. Our tailored Power Futures School helps companies understand and develop hedging strategies.
Third, we are promoting spark spread trading by combining yen-denominated power and LNG futures. This allows Japanese power companies to manage fuel and power price risk without adding foreign exchange risk. LNG futures activity is increasing, and the availability of margin offsets between power and LNG futures improves capital efficiency.
As market activity grows, participants require advanced execution and management tools. How do you view the role of global trading platforms like TT in expanding the TOCOM power market?
As the market evolves, factors including the participation of major financial institutions are increasing the need for sophisticated execution and risk management tools. Solution providers such as TT therefore have an important role in this growth.
Across JPX Group’s derivatives markets, advanced strategies and high-speed execution are becoming more important, and TT is a leading vendor supporting these trading environments. We are also hearing from more participants that they use TT in their trading operations.
OpenGamma’s technology, acquired by TT in 2025, is also used in JSCC’s margin simulation environment, helping participants understand margin requirements and risk exposures. Together, these technologies can improve market access, support international participation and contribute to liquidity growth.
Looking ahead, how do you expect the Japanese power futures market to evolve over the next few years? What upcoming milestones can market participants anticipate from TOCOM, and what is your message to traders looking at this market?
Japan liberalized its power market more than a decade after Europe and the United States. While Japan’s power market remains less developed than these more mature markets, we believe there is considerable potential for growth. Over the next 10 years, and potentially sooner given recent energy price volatility, we expect power futures trading to approach the scale of mature overseas markets.
In addition, while the Carbon Credit Market operated by Tokyo Stock Exchange, a member of JPX Group, currently facilitates trading in carbon credits only, we hope to see a carbon futures market develop in Japan in the future. If that occurs, we expect the market to evolve toward clean spark spread trading, enabling participants to hedge both power and energy costs as well as environmental costs.
Japan is an attractive and evolving market. TOCOM will continue to provide a transparent, reliable and accessible marketplace and work with participants worldwide to support its next stage of growth.
To learn more about TT’s solutions for trading both Japanese and global power markets, contact us today.