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Japan's main market for emerging technology companies is in talks with the Bombay Stock Exchange for an alliance that could lead to Indian companies listing on its board in Tokyo.
The Jasdaq Securities Exchange and the BSE, Asia's oldest exchange, are in talks about a memorandum of understanding to deepen co-operation, a person familiar with the matter said in Mumbai.
The talks are part of efforts by the Bombay Stock Exchange, its bigger Indian rival, the National Stock Exchange, and India's two major commodities exchanges to forge global alliances to help expand their product ranges and stay abreast of global consolidation.
The BSE in February sold a 5 per cent stake to Deutsche Börse - the maximum permitted for a foreign investor in an Indian equities market - followed by another 5 per cent to the Singapore Stock Exchange.
The investment by Deutsche Börse was the first of its kind for the European company in Asia and was intended as a potential initial step towards forging a larger alliance among Asian bourses, BSE officials said at the time.
The deal followed moves by the NSE to sell a combined 20 per cent stake to a group of investors led by the company that operates the New York Stock Exchange, NYSE Group. NYSE Group paid $115m for 5 per cent of the NSE.
The Jasdaq, which converted three years ago into an exchange from an over-the-counter market, is facing increasing competition from the Tokyo Stock Exchange, the world's second-largest market.
The Jasdaq has suffered from falling trading volumes and has forecast a loss for the full year. It is keen to seek new overseas alliances to attract more liquidity and revitalise its fortunes.
But while there has been plenty of movement among Indian bourses and commodity exchanges to draw in foreign investors, co-operation has so far proved tentative.
The BSE has announced an agreement with the US Futures Exchange to license its benchmark Sensex Index for US dollar-denominated futures trading, beginning in February next year.
"USFE's Sensex contract will allow eligible US investors to directly participate in India's equity markets for the first time, without requiring American Depositary Receipt authorisation," the BSE said.
Earlier, the BSE said Deutsche Börse would act as the exclusive worldwide sales partner for BSE indices.
The NSE has yet to announce significant initiatives covering co-operation with the NYSE.
The BSE declined to comment on any potential deal with Jasdaq.