The Tokyo Stock Exchange (TSE) was forced to suspend trading in all shares for the first time on Tuesday after its computer system crashed in an embarrassment for Asia’s largest bourse, which plans to go public.
Software failure delayed the start of trade for the entire morning and the first 30 minutes of the afternoon session, but shares still managed to rise 1,92% after dealing resumed to close at a four-and-a-half-year high.
The crash came a day after two important events for the market — Prime Minister Junichiro Koizumi’s Cabinet reshuffle and the publication of an upbeat twice-yearly economic outlook from the Bank of Japan.
It also comes at a delicate time for the TSE, which has already been forced to delay a planned initial public offering of its own shares that it hopes will boost efficiency and competitiveness.
”The technical glitch … may cause further delay to the TSE’s initial public offering,” said Mitsuru Yoshikawa, head of the Capital Market Research Headquarters of the Daiwa Institute of Research.
However, the market shrugged off the glitch, with the Nikkei-225 rising 261,36 points to close at 13 867,86, its highest level since May 24 2001.
Masayoshi Yano, strategist of Tokai Tokyo Securities, said the system trouble did not affect stock prices after deals resumed.
”It shows how strongly the market is moving right now,” he said. ”Dealers have such high expectations for the future.”
TSE MD Tomio Amano blamed the suspension on a defect in software introduced in October for processing data from securities companies.
He said the TSE may seek compensation from Fujitsu, the company that developed the software, which was introduced as part of a system expansion in response to rising trading volume.
The newly appointed state minister for financial policy, Kaoru Yosano, expressed disappointment at the problems.
”I want the bourse to find out the cause of the trouble and to implement appropriate measures not to let a problem like this happen again,” Yosano said.
Regional stock markets in southern Fukuoka and northern Sapporo also suspended their trading of stocks and convertible bonds for several hours, as they share the same system with the TSE.
The TSE said it was the first time in its history of more than half-a-century that trading in all stocks was halted and the first major system failure since 1997.
Trading of futures and options was unaffected.
The TSE, which was founded in 1949 in its present form, transformed itself from a membership organisation to an incorporated company in late 2001 in the aim of going public as soon as possible.
Under the exchange’s own rules, a firm must operate as an incorporated company for three years before listing its shares.
However, the TSE has encountered resistance from Japan’s Financial Services Agency and some governing-party lawmakers over concerns about possible conflicts of interest due to the exchange’s self-regulatory functions.
TSE President Takuo Tsurushima said last month that the exchange was unlikely to go public this fiscal year and a listing should be decided at the TSE’s shareholders’ meeting in June. — Sapa-AFP