Tokyo Stock Exchange Faces A Technical Glitch In Its Trading System

Tokyo Stock Exchange witnessed a major glitch in its electronic trading system that halted trading on Thursday. The management blamed the outage as a hardware problem which is also failed its backup device. The stock exchange body confirmed that the trading will be resumed uninterrupted on Friday.

“TSE is currently planning to replace the hardware and taking steps, including other maintenance, to ensure normal trading from tomorrow onwards,” Japan Exchange Group said in a statement. Koichiro Miyahara, CEO of TSE, said that it will hold a news conference at 4:30 pm. (GMT +9).“We have caused great inconvenience to many market participants, investors, and listed companies, ” he added.

Takashi Hiroki, chief Strategist at brokerage Monex in Tokyo said that the investors were looking forward to buying shares or increasing their holdings after witnessing the Wall Street rise after the Presidential debate. “The timing is really just bad,” he said. “(The overnight rise) could have prompted a surge in stock buybacks in the early Japanese market. But the market was robbed of that chance,” he added.

The world’s third-largest stocking trade market has been witnessing minor problems since the introduction of the new system in 2010. However, it has encountered its first suspension of trading after 1999. Fujitsu who developed the electronic trading system said that it’s investigating the problem. TSE’s daily turnover has surpassed USD 22 Billion over the last year. The trading was closed in South Korea and China on the occasion of national holidays.

 It’s not the first time a stock exchange body has witnessed issues with its system. In August, the New Zealand Stock Exchange encountered a cyberattack that halted trading for over four days. Other stock exchange platforms in Japan such as Sapporo, Nagoya, and Fukuoka have also suspended their trading. This left Osaka Exchange as the only platform to trade the shares. Fujitsu’s spokesperson Takeo Tanaka didn’t give any details on the glitch; however, he denied that it was a cyberattack.

“This is very problematic — when things like this happen, investor confidence in the Japanese market get impacted,” said Ryuta Otsuka, a strategist at Toyo Securities Co. “It could later weigh on Japanese stocks.” Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities said that “Stocks were expected to rebound quite strongly today after the presidential debate, so this system problem has poured cold water over that.”

The Chief Cabinet Secretary Katsunobu Kato added that it’s “extremely regrettable” that trading opportunities have been restricted here in Japan. In October 2018, around 40 brokers could not execute their orders due to the massive data transmission from one broker while in 2012, 241 stock encountered issues in the first half of the trading day after the system was upgraded to “Arrowhead” in 2010. The latest outage may tamper the credibility of new Prime Minister Yoshihide Suga whose prime priority is to digitize the economy/