Tokyo stock market halts trading, citing glitch
By Ben Dooley
The Tokyo Stock Exchange shut down for the day Thursday as its operator raced to solve a technical glitch that halted equities trading throughout the world’s third-largest economy.
The breakdown is the worst ever for one of the globe’s biggest platforms to buy and trade stocks, bewildering investors who were unable to place orders. While the exchange has experienced outages in the past, none had stopped trading for a whole day. The outage could have significant cost to investors, depending on how long it lasts.
The shutdown stemmed from a problem in a system that reports market information, Japan Exchange Group, the company that operates the system, said in a statement on its website.
The glitch first became apparent Thursday morning in Tokyo, before trading began, postponing the beginning of the session. At about noon, the company announced that trading would be stopped for the entire day.
The company offered its “deepest apologies” to investors and others affected by the shutdown, but did not give details about the cause and said it did not know when the problem would be resolved.
Trading was also halted at exchanges in Nagoya, Sapporo and Fukuoka, the companies running them said. After-hours trading on the markets was also stopped.
Trading in Japan’s second-largest exchange, in Osaka, appeared to be unaffected.
Over 3,700 companies are listed in Tokyo.
Speaking during a regularly scheduled news conference Thursday, Japan’s top government spokesperson, Katsunobu Kato, called the breakdown “very regrettable” and said that the exchange was taking “actions to identify the cause of the problem and restore it.”
He said that there was no indication that the shutdown had been caused by a cyberattack, but added that “at this point, we can’t say for certain.”
Earlier this year, a distributed denial-of-service attack disrupted trading on New Zealand’s stock exchange, raising concerns about the vulnerabilities of global stock markets to threats from hackers.
As of December, the Japan Exchange Group ran the world’s third-largest equity market, behind the New York Stock Exchange and Nasdaq, with nearly $6.2 trillion worth of stocks, according to the World Federation of Exchanges. It had more listed companies than any other exchange, the group said.
Thursday’s breakdown effectively halted all trading in the region. Japan was the only major market expected to open, with exchanges in mainland China, Hong Kong, Taiwan and South Korea closed for autumn holidays.
The shutdown was a headache for investors who had been awaiting the release of a quarterly report from the Bank of Japan that tracks economic sentiment among the country’s companies. The report showed cautious optimism among firms adjusting to a future in which economic activity will most likely continue to be limited by restrictions on work and life imposed by the coronavirus.
Stocks in Tokyo crashed in March because of investors’ fears about the pandemic’s economic effects. Prices have recovered in the months since, with investors flooding into companies, such as pharmaceutical firms, expected to benefit from the global fight against the virus. It is currently down more than 5% since the beginning of the year.
The Tokyo Stock Exchange introduced its current market data system in 2010 and upgraded it in November 2019. The system, known as Arrowhead, was developed by Japan’s Fujitsu Limited.
Japan has faced similar problems over the years, with system glitches occasionally stopping some trading for brief periods. The last systemwide shutdown was in 2005, when a software upgrade malfunctioned, shutting the market down for half a day.
Malfunctions are not limited to Japan. In 2015, a technical issue shut down the New York Stock Exchange for nearly four hours. In 2013, a “flash freeze” halted trading on Nasdaq.