"Unlike in Europe where the introduction of the euro spurred rapid consolidation between exchanges, we have not seen anything like that in Asia just yet," said a TSE official, who declined to be identified.

"But when the time comes for Asian bourses to combine forces, we hope to play a central role," he said.

He said a plan unveiled on Thursday to set up a global trading platform with the New York Stock Exchange (NYSE) and eight other exchanges for around-the-clock stock trading may bring the TSE, the world's third-biggest stock exchange, a step closer to that goal.

Competition is already heating up in the domestic market with the pending June 19 launch of Nasdaq Japan, a sister market of Nasdaq in the United States that aims to use its US connection to attract investors.

Nasdaq Japan was created as a new section of the Osaka Securities Exchange (OSE), the nation's number-two stock exchange and the TSE's arch rival. As a pre-emptive strike, the TSE last December set up its own market for startups, called Mothers.

The TSE, home to nearly 2,000 companies, said the planned global platform would give it an edge in the battle with Nasdaq Japan by allowing foreign investors easy access to the exchange.

Foreigners have already boosted their presence in Japan, accounting for nearly 40 per cent of the total value of transactions on Japanese exchanges in 1999.

"By making it easier for global investors to trade in Japanese equities, we hope our turnover will increase with the the global platform, although it's hard to estimate now," the TSE official said.

The ambitious plan to create a global equity market is widely expected to divide the world's stock exchanges into two camps: one led by Nasdaq, which is fast expanding its global reach, and another led by the New York Stock Exchange.

The TSE official said details of the new trading platform have yet to be hammered out, although it will aim to provide global investors competitive services in terms of both cost and security.

He said there are still many hurdles, such as how to integrate trading systems and address legal issues, but the global platform will have to be in place with a few year if it is to succeed. "It would be useless if we were too slow in tackling this, say taking five to 10 years," the official said.The TSE would welcome participation by other Asian bourses such as the Singapore Exchange (SGX), although the new global platform will initially focus on trade in cash stocks rather than futures and options, the official said.

Other participants in the project are the Australian Stock Exchange and bourses in Paris, Brussels, Amsterdam, Toronto, Hong Kong, Mexico and Sao Paolo.

NYSE Chairman Richard Grasso on Thursday estimated that about 400 global firms, half of which would be based in the United States, would meet the criteria to trade on the global platform. The global project, which would trade big-name shares with market capitalisation exceeding $20 trillion, would control 60 per cent of the world equities market and link all the major trading time zones.

Since neither New York nor the main European bourses are open during TSE's trading hours, the start of 24-hour trading could make Japanese bluechips like Sony Corp more sensitive to overseas news, traders said, although they noted Sony and some other high-profile Japanese issues are already traded overseas.

The plan drew a muted reaction from market participants, who want to wait and see how the new global platform shapes up.

"It's only an issue for the TSE, which wants to survive in fierce global competition," said Tetsuya Ishijima, chief strategist at Okasan Securities. He said market players in Japan were more concerned about the prospects for new markets for start-ups, given a growing number of initial public offerings.

The OSE and Nasdaq Japan played down any threat from the TSE's global push, saying their business plans would not be affected by the move.

Hidekazu Toga, the OSE's general planning department director, said the TSE's move was in line with the global trend to seek partnerships to cope with intensified global competition.

"We believe competition among stock exchanges will benefit both investors and companies by boosting efficiency and expanding their options," he said.