Tokyo Inventory Change Glitch Brings Buying and selling to a Halt

TOKYO – The Tokyo Stock Exchange closed for the day on Thursday as its operator fixed a technical bug that halted stock trading in the world’s third largest economy.

The breakdown is the worst ever for one of the world’s largest platforms to buy and trade stocks, confusing investors who have been unable to place orders. While the stock market has failed in the past, none had stopped trading for an entire day. The failure can cause significant costs to investors, depending on how long it lasts.

The shutdown was due to a problem in a system reporting market information, the Japan Exchange Group, the company that operates the system, said in a statement on its website.

The glitch first became apparent in Tokyo on Thursday morning before trading began and postponed the start of the session. Around noon, the company announced that it would cease trading for the entire day.

The company made its deepest apologies to investors and others affected by the shutdown, but did not provide details of the cause and said it did not know when the issue would be resolved.

Trading has also ceased on the Nagoya, Sapporo and Fukuoka stock exchanges, the companies said. Trading in the markets outside of business hours has also ceased.

Trading on Japan’s second largest exchange in Osaka did not appear to be affected.

Over 3,700 companies are listed in Tokyo.

During a regular press conference on Thursday, Japan’s top government spokesman Katsunobu Kato described the collapse as “very unfortunate” and said the exchange was “taking steps to identify the cause of the problem and restore it”.

He said there was no evidence that the shutdown was caused by a cyberattack, but added that “we cannot say for sure at this point.”

Earlier this year, a distributed denial-of-service attack disrupted trading on the New Zealand Stock Exchange, raising concerns about the vulnerability of global stock markets to hacking threats.

In December, the Japan Exchange Group operated the world’s third largest stock market after the New York Stock Exchange and Nasdaq, with stocks valued at nearly $ 6.2 trillion, according to the World Federation of Exchanges. There were more publicly traded companies than any other exchange, the group said.

Thursday’s collapse effectively halted all trade in the region. Japan was the only major market expected to open. The stock exchanges in mainland China, Hong Kong, Taiwan and South Korea were closed for the autumn break.

The closure was a headache for investors who had been waiting for the Bank of Japan to release a quarterly report that tracks the economic sentiment of the country’s companies. The report showed cautious optimism among companies poised for a future where economic activity will most likely continue to be constrained by the restrictions on work and life imposed by the coronavirus.

Tokyo stocks tumbled in March amid investor fears over the economic impact of the pandemic. Prices have rebounded in the months since then, and investors are flocking to companies like pharmaceuticals that are expected to benefit from the global battle against the virus. It’s currently down more than 5 percent since the start of the year.

The Tokyo Stock Exchange launched its current market data system in 2010 and updated it last November. The system known as the arrowhead was developed by Fujitsu Limited, Japan.

Japan has faced similar problems over the years, with system malfunctions occasionally halting trading for brief periods. The last system-wide shutdown occurred in 2005 when a software upgrade failed and the market closed for half a day.

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