The Tokyo Stock Exchange may begin talks with its smaller Japanese rival on a possible merger to survive a wave of sector consolidation and fend off competition from fast-growing Asian bourses. Atsushi Saito, the chief executive of the TSE, said combining the TSE's dominant position in cash equities trading and the Osaka Securities Exchange's strength in derivatives could make for an effective alliance. "They must be feeling a sense of crisis that they will be swallowed by the wave of overseas consolidation," said Tsutomu Yamada, market analyst at Kabu.com Securities. "But I'm not sure simply creating an 'all-Japan' bourse is the answer."
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