TOKYO (Reuters) – A hardware failure at the Tokyo Stock Exchange on Thursday closed the business in the world’s worst-ever third-largest stock market, aiming to reopen on Friday.
TSE’s first full-day suspension began since it began all-electronic trading in 1999, leaving investors searching in vain to buy shares after the first US presidential debate.
“I think the incident is responsible for all the confusion that has arisen for investors and market participants,” TSE Chief Executive Officer Koichiro Miehara said in a news briefing.
It also calls into question the credibility of the exchange as Japan’s new Prime Minister Yoshihida Suga has made digitization a top priority and Tokyo’s hopes of attracting more Hong Kong banks and fund managers amid concerns over new security legislation imposed by China Can be smashed.
TSE stated that the outage was the result of a hardware problem in its “arrowhead” trading system, and later a failure to switch to a backup device.
Tokyo Governor Yuriko Koike said a quick fix was important to ensure trust in the Quickly $ 6 trillion market, which lagged behind New York and Shanghai, according to data from the World Federation of Exchange.
Traders and analysts told Reuters that many market participants expected to buy stocks or increase holdings after an overnight surge on Wall Street.
Small regional markets in Nagoya, Fukuoka and Sapporo were also forced to suspend trading because they use the TSE system, the only equity market operating in Japan on Thursday, except for the derivatives-focused Osaka Exchange.
“There will be a huge jump in trading volume around the US presidential election, and this raises some concerns about TSE’s ability to make large increases in orders,” said Daiwa Securities senior strategist Hideyuki Ishiguro.
Nikkei futures climbed 0.56% on Thursday, with gains in US stocks.
Japan’s top government spokesman, Katsunobu Kato, described a news briefing as “extremely regrettable”, saying, “We have to make sure that this kind of situation is never repeated.”
While Tokyo has been eclipsed by Shanghai’s market in recent years, it is still a global hub for foreign investors. The volume of shares on the TSE main board averaged 1.13 billion in the last 30 days.
TSE has suffered from technical problems in the past and was notorious for sluggish trading, although fewer glitches have occurred since the adoption of a new system in 2010.
Fujitsu Ltd., which developed the business system, said it was investigating the problem.
Nikkei fell 1.5% on Wednesday, its biggest drop in two months, as a scathing debate between US President Donald Trump and Democrat Joe Biden exposed the risk of an uncertain outcome for the presidential election.
Reporting by Stanley White, Imi Yamamitsu, Hideyuki Sano, Chang-ran Kim, Takashi Umakeva, Sakura Murakami; Edited by Kim Coghill, David Dolan, Simon Cameron-Moore and Alexander Smith