The LSE, which already operates a London-based market called AIM _ the Alternative Investment Market _ for start-ups, will provide support to the TSE's planned establishment of a similar market for trading shares of start-up companies and other high-risk products.
The exchanges said the new market will be established by the end of 2008 and would be operated as a joint venture on an equal basis.
Japan has been attempting in recent years to position Tokyo as a financial center for Asia, seeking listings from elsewhere in the region for its bourse.
The TSE earlier this year announced an non-exclusive agreement with the New York Stock Exchange allowing the two stock markets to cooperate on joint developments such as financial products, mutual listings and technology.
It is signing such deals as it completes its demutualization process, which is due to be completed in 2009 when the new public company will be open to mergers and acquisitions.
The choice of the city of Helsinki is not incidental as the capital of Finland had hosted US-Soviet negotiations on the limitation of nuclear stockpiles in 1969