TSE planning for nighttime trading

The Tokyo Stock Exchange plans to open three-hour trading sessions beginning at 8:30 p.m. from next spring in response to the growing use of the Internet for trading stocks, TSE officials said Friday.

The TSE currently conducts regular trading sessions from 9 a.m. to 11 a.m. and 12:30 p.m. to 3 p.m., complemented by “off-the-sessions” trading that takes place from 8:20 a.m. to 9 a.m., 11 a.m. to 12:30 p.m. and 3 p.m. to 4:30 p.m.

During night trading, stocks will be allowed to move only within a set range from their prices at the close of that day’s regular trading session in order to avoid wild price fluctuations, the officials said.

The TSE will only accept limit orders, or transaction requests placed by investors who want to limit price ranges for their buy or sell orders.

The surge in online stock trading by an increasing number of individual investors who place orders in the evening after work prompted the TSE’s move. Securities houses currently execute such orders the following morning.

With the new session, the TSE is hoping to come out ahead in the intensifying competition with other exchanges, including the planned launch of the Nasdaq Japan stock market and 24-hour trading using an electronic communications network, which would not require existing stock exchanges.

The TSE will begin preparations for the new session after winning consent from member securities houses. Members, however, may oppose the plan for fear of an increase in labor and other costs.