The Tokyo Stock Exchange halted trading in all listed stocks for a full day Thursday due to the biggest technical glitch it has experienced since it introduced a computer system in 1999.
The unexpected shutdown came about due to a hardware glitch inside the trading system, Japan Exchange Group (JPX) Chief Information Officer Ryusuke Yokoyama told reporters, adding that it was not due to cyberattacks, as the malfunction occurred in areas that are not connected to the internet.
The exchange is preparing to resume trading Friday by restarting the overall system, he said.
Representatives announced later in the evening that trading would open as planned the following day.
“As someone in charge of the market, I feel responsible,” TSE President Koichiro Miyahara said. “We have caused serious inconvenience to a lot of people, and I deeply apologize.”
This marked the first exchange-wide shutdown in trading since the January 2006 halt triggered by a surge in trading in Livedoor shares after police launched an investigation into the internet company. Trading in all shares was suspended in November 2005 due to a computer programming error.
Bourses in Fukuoka, Nagoya and Sapporo, which use the same trading system, also halted trading for the full day.
The halt is the first since the state-of-the-art Arrowhead stock trading system, developed by Fujitsu Ltd., was introduced in 2010. It has been subsequently revamped twice, in 2015 and 2019.
The trading was suspended from the start of the regular morning session at 9 a.m., as the exchange could not switch to an alternative trading mechanism following the discovery of the glitch, which was related to a malfunction of a disc inside Arrowhead that led to an inability to distribute share prices, Yokoyama said.
TSE said it is working with Fujitsu to fix the problem. Fujitsu did not reply to a request for comment.
Although the halt affected trading for most users, electronic proprietary trading systems operated by some brokers including Japannext and Rakuten Securities, which trade stocks without the intervention of an exchange, were operating normally.
The Financial Services Agency has instructed JPX and the TSE to investigate the matter, Chief Cabinet Secretary Katsunobu Kato told reporters.
“An inability to trade at the exchange, which serves as an important market infrastructure, means a restriction in trading opportunities for investors, and it is very regrettable” he said. “We want this to be investigated thoroughly so that this would never happen again. We would want it to resume trading at the earliest possible timing.”
“It came out of the blue but we can’t do anything about it,” said Hideyuki Suzuki, general manager of the investment market research department at SBI Securities. “Today marks the start of a new month and the second half of the fiscal year, and we expected a bullish market.”
The Osaka Exchange, which uses a different system and mainly trades derivatives products and index futures, was operating normally.
The key December contract on the Nikkei futures average was up 0.56 percent in afternoon trading in Osaka, following a higher close on Wall Street.
JPX, which also operates the Osaka Exchange, also suspended block trading and basket trading during off-trading hours.
More than 3,700 firms list their shares on the TSE, with a combined market capitalization of around ¥640.75 trillion, the world’s third-biggest following the New York Stock Exchange and Nasdaq.
Some 1.44 billion shares changed hands on the exchange’s first section for ¥2.9 trillion on Wednesday, with the 225-issue Nikkei stock average ending the day down 1.5 percent at 23,185.12.
A total of three firms including Hirogin Holdings Inc., a holding company for Hiroshima Bank and some other financial firms, listed their shares Thursday but they ended the day with no price on their debut date.
Staff writer Satoshi Sugiyama contributed to this report.