Some market participants have claimed that they have had difficulties engaging with the Tokyo Stock Exchange over the years. The most common issue was that the Tokyo Stock Exchange was too large and complex in comparison to other existing exchanges. As previously stated, the Tokyo Stock Exchange is divided into four sections. To clarify, the largest and medium-sized businesses are divided into the first and second sections. There are also two additional sections known as the Mothers and Tokyo Pro Market, which are intended for high-growth and emerging stocks, as well as professional investors, respectively.
In addition, each section has different listing requirements to complete. There were 2,190 recorded companies on the first section as of last year, which has more than doubled since the 1990s. It should be noted that there are plans to reform the Tokyo Stock Exchange. Some of the plans called for simplifying the criteria for each section. It was also planned to reduce the number of sections to which companies should belong, which are Prime, Standard, and Growth. Finally, the market capitalization may be increased in order to reduce the number of companies in the top tier section.

The Tokyo Stock Exchange faces several challenges that impact its growth and efficiency. Limited liquidity in some sectors reduces trading activity, while Japan’s aging population lowers domestic investment. Past concerns over corporate governance and transparency have also affected investor confidence. Technical issues, including system outages, have raised reliability concerns. Strong competition from global financial centers like New York and London adds further pressure. In addition, fluctuations in the yen create uncertainty for foreign investors. Ongoing economic stagnation and deflation in Japan continue to restrict market expansion and make it harder to attract consistent international investment.