Morgan Stanley prepares to enter Japan spot power trading market

[TOKYO] Morgan Stanley is preparing to start trading physical power in Japan, the latest overseas financial institution looking to profit off the volatile market.

The bank has designated a person to hire and lead personnel for its spot trading business, Alberto Tamura, head of Morgan Stanley Japan Holdings, said. A spokesperson for Morgan Stanley declined to name the person.

Access to the power market will enable the company to provide clients with energy hedging solutions in the long run, Tamura said. The move will be “a consistent and important driver of our revenues going forward”, he said.

Liberalised almost a decade ago, Japan’s power market has attracted both domestic and overseas firms over the last few years, with the futures trading volume increasing rapidly. Severe weather patterns, more intermittent renewable energy sources coming online and uncertainties surrounding the nation’s nuclear power restarts all create volatility in the market and increase a need for hedging solutions.

Overseas firms have also taken steps to obtain licenses and open physical offices required to join the Japanese spot power market. Goldman Sachs last year acquired a license from the nation’s trade ministry.

Morgan Stanley acquired a local power retailer to absorb its license in 2025, according to its spokespeople. The bank has traded Japan power futures in the past, they said. BLOOMBERG