Japan Association of Securities Dealers Automated Quotation Explained

When investors think of global stock exchanges, Wall Street’s NASDAQ and the ASX spring to mind. But in Japan, there’s a platform with a fascinating legacy: the Japan Association of Securities Dealers Automated Quotation, better known as JASDAQ. While its name may not be front-of-mind for Australians, understanding JASDAQ’s evolution offers sharp insights into how global markets function and what lessons local investors can draw for navigating the ever-evolving world of securities trading.

JASDAQ: Japan’s Answer to NASDAQ

JASDAQ began in 1963, originally as an over-the-counter (OTC) trading system. Inspired by the American NASDAQ, its mission was to support growing Japanese businesses—especially tech and startups—by providing a public market for raising capital outside the main Tokyo Stock Exchange. By the 1990s, JASDAQ had become synonymous with innovation-driven Japanese firms, much like how the NASDAQ became the home of tech giants in the US.

• Origins: Launched by the Japan Securities Dealers Association (JSDA) to modernise Japan’s capital markets

• Automated Quotation: JASDAQ pioneered electronic trading in Japan, helping to speed up transactions and improve transparency

• Growth Engine: Provided a launchpad for companies that didn’t meet the stricter listing requirements of the Tokyo Stock Exchange

For decades, JASDAQ was the first stop for investors seeking early-stage growth opportunities in sectors like biotech, IT, and communications—industries that now dominate global portfolios.

Modernisation and Integration: JASDAQ in the 21st Century

By the 2000s, Japan’s stock exchange landscape was changing rapidly. The Tokyo Stock Exchange (TSE) and Osaka Securities Exchange (OSE) consolidated their operations, leading to the integration of JASDAQ into the OSE in 2013. As of 2025, JASDAQ operates as a section within the Tokyo Stock Exchange, known as the TSE Standard and TSE Growth markets.

This transformation was driven by:

• Regulatory Reforms: Japan’s Financial Services Agency encouraged consolidation to boost efficiency and global competitiveness

• Technological Advancements: Enhanced trading systems and surveillance increased security and liquidity

• Internationalisation: Streamlined access for global investors, making Japanese growth stocks easier to trade from abroad

For Australians, this integration means that Japanese small- and mid-cap stocks are more accessible via major global brokerages, and liquidity is deeper—an important factor for anyone looking to diversify internationally.

What Can Australian Investors Learn from JASDAQ?

Australia has its own robust small-cap and growth company ecosystem, primarily through the ASX. However, JASDAQ’s journey offers several lessons:

• Support for Innovation: A thriving secondary market is vital for startups and emerging sectors. JASDAQ’s legacy shows the importance of tailored listing rules and market infrastructure for innovation.

• Regulatory Oversight: The Japanese model of strong self-regulation by associations like JSDA helped balance innovation with investor protection—a useful model as Australia debates fintech and digital asset regulation in 2025.

• Global Integration: As Australian companies and investors become more global, the JASDAQ experience underscores the value of harmonising systems for cross-border capital flows. With the ASX continuing its blockchain-based trading system rollout in 2025, there are clear parallels in embracing new tech for market efficiency.

In a world where capital moves quickly and innovation is borderless, exchanges like JASDAQ demonstrate how markets can adapt, consolidate, and thrive by focusing on the needs of growth companies and their investors.

JASDAQ’s Legacy: Still Relevant in 2025

Today, JASDAQ’s spirit lives on in the TSE’s Growth Market, supporting the next wave of Japanese innovators. For Australian investors and policymakers, the story of JASDAQ is a reminder that dynamic markets need both strong foundations and a willingness to evolve.

Whether you’re a seasoned investor or just curious about international opportunities, understanding the architecture of global exchanges like JASDAQ can help you make more informed, confident financial decisions in 2025 and beyond.