The Tokyo Stock Exchange (TSE) has revealed that it is in discussions with the London Stock Exchange (LSE) over a possible alliance between the two bourses.
A spokesman for the TSE, Asia's largest bourse, said that the two exchanges had not discussed a capital alliance, but confirmed that talks between them had been initiated by the LSE last month.
"We are in talks with the LSE on a possible business alliance," said spokesman Toru Onoda.
Although details of the talks have yet to be confirmed, the Japanese daily, Nihon Keizai, speculated on discussions between the LSE and TSE on Saturday, claiming that negotiations might cover a cross-listing of exchange-traded funds and the development of trading systems and strategies to revive the bourses for start-up companies.
News of the talks between the LSE and its Toyko counterpart come as the world's leading exchanges look towards new alliances and mergers with one another in order to keep up with growing competition in the global financial market.
The TSE, which announced last month that it was in talks with the New York Stock Exchange (NYSE), about the possibility of a capital alliance to bring together the world's two largest equities markets, has also said that it is looking to form co-operative agreements with other Asian bourses, indicating the possibility of a future merger with the Korean stock exchange.
Meanwhile, the New York-based Nasdaq signed alliance deals with both the Korea exchange and the Toyko-based Jasdaq earlier this month, while the exchange has also acquired a 25 per cent stake in the LSE this year.
In a further consolidation of the global stock market, the NYSE struck a $10 million (£5.27 million) deal in June to acquire the Paris-based bourse Euronext.