The Tokyo Stock Exchange suspended all-day trading on Thursday due to a hardware malfunction, which led to the worst malfunction in the world's third-largest course.
Japan Exchange Group Inc., the operator of
TSE, did not give a time frame for the resumption of trading, and said it would
announce plans for tomorrow's meeting later. Stopping means that buying and
selling of thousands of shares will be frozen’ on the first day of the new
quarter. The previous shutdown affected only part of the business day.
The problem has dampened investor
sentiment following the overnight positive performance of the US stock market
and other major markets in the region, including China, Hong Kong, South Korea
and Taiwan. The closure could also affect investor confidence in the Japanese
market system.
"It's very disturbing. When things
like this happen, it affects investor confidence in the Japanese market,"
said Ryuta Otsuka, a strategist at Toyo Securities.
The exchange said there was no indication
that the closure was related’ to hacking. Chief Cabinet Secretary Katsunobu
Kato, who said it was “regrettable”, echoed the halt that trade opportunities
had been’ curtailed.
Blow trust
New Zealand is on high alert for any
upheaval in global markets after a cyber-attack triggered a four-day business
shutdown in August.
Exchanges in other markets of the country,
including Sapporo, Nagoya, and Fukuoka, have also suspended trade. Derivatives,
including futures trading on the Osaka Exchange, which are not affected’ by the
system problem. As of 12:44 pm, futures on the Nikkei 225 stock average in
Osaka rose 0.2 percent. Shares of Japan Exchange fell 4.7 percent on the PTS
platform of Japan Accent.
The benchmark Topics Index fell 2%
yesterday, reducing its profit for September to 0.5% and closing the current
quarter with a 4.3% advance. A Tokyo-based equity trader at a local brokerage
says there will be queues of mutual funds at the beginning of this month and
the second half of the fiscal year, which could increase volatility tomorrow if
the course does not open today. ۔
Japan's 15 6.15 trillion stock market is
the world's third-largest after the United States and China. At the top of the
Tokyo Stock Exchange are 2,167 stocks, with a total daily turnover of about $
22 billion over the past year.
Makoto Sengoku, a market analyst at the
Tokyo Research Institute said he was looking at the response to the TSE Mother
Index, a key measure of performance for startups in Japan. "For retail
investors who are trading on a daily basis, today may be a shock, but for those
who are not trading frequently, it is not as effective," he said.
Date of error
The system problem is the biggest since a
series of computer problems in the mid-2000s that led to the resignation of the
exchange president. Trading was suspended’ for 4/2 hours in 2005 because, for
the first time, equity trading was completely suspended due to a booted system
upgrade. In January 2006, the exchange began trading following an increase in
orders, following an investigation by the high-flying Internet company Livedoor
Company, which overloaded its computer system. As a result, trading hours were
shortened’ to three months.
The Tokyo Exchange introduced its Sharp Arrowhead
system, developed by Fujitsu Limited and other companies in January 2010, but
that did not completely resolve the issue. In 2012, a computer glitch halted
trading on 241 securities, while a year later; a system glitch took derivative
trading offline.
Fujitsu spokesman Taco Tanaka said the
company was investigating the latest case, but declined to comment on details.
People familiar with the matter said Japan's Financial Services Agency was
reaching out to brokers to assess the impact of the incident on clients.
The trade took place on the same day that
the Bank of Japan's Tankan survey, one of Japan's most-watched economic
indicators, was released’ just 10 minutes before trading began. The major
manufacturers in the survey have taken advantage of its lowest point and
supported the idea that the worst-case scenario for the economy could end, even
though confidence is lower than before the epidemic.
READ MORE
