The Tokyo Stock Exchange (TSE) plans to extend its trading day by 30 minutes, making the first change to cash equity trading hours in more than a decade.

The market will close at 3:30 p.m. local time if the proposed changes are implemented. The switch is planned at the same time as a large upgrade of the exchange's trading systems, in the second half of the fiscal year ending March 2025, Japan Exchange Group Inc., which operates the exchange, said in a statement.

"Trading hours in Tokyo are among the shortest in the world,” said Akira Kiyota, the chief executive officer of Japan Exchange. The effect of extending hours would be seen when volume was heavy, he said, even if transactions might not immediately increase after the change.

The Tokyo bourse currently trades between 9 a.m. and 3 p.m. local time, with a lunch break between 11:30 a.m. and 12:30 p.m. The five-hour trading day is considerably shorter than many other regional rivals. Japan is the world’s third-largest stock market with total market capitalization of about $6.8 trillion, according to Bloomberg-compiled data.

Kiyota also said that he wasn’t currently thinking of getting rid of the lunch break, a move that had earlier been speculated, or adding a night session.

"I think it was kind of inevitable that this was going to happen, to bring TSE in line with other market centers in Asia which have longer hours of trading,” said Serdar Armutcu, head of electronic trading at Mita Securities in Tokyo. "I think it will have the impact to bring additional liquidity but I don’t expect it will be significantly more.”

Tokyo Stock Exchange last tweaked trading hours in 2011, shortening its lunch break by 30 minutes to the current one hour. A later closing time would be the first extension since 1954, when it was changed from 2 p.m. to 3 p.m.

A previous recommendation, in 2014, for the exchange to consider an evening session failed to result in changes. The plans were dropped following lobbying from traditional brokerages, who opposed longer hours due to increased costs. However, the subsequent years have seen an increase in the number of investors using online brokerages.

The exchange will also discuss the introduction of a five-minute closing auction, widely used in overseas exchanges including the London Stock Exchange to determine the closing price of each stock.

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