The Tokyo Stock Exchange (TSE) said Monday that President Koichiro Miyahara was stepping down to take responsibility for a technical glitch on the bourse in October that was its worst since electronic trading began in 1999, causing the exchange’s first full-day suspension of electronic trading, reports Osamu Tsukimori.
The announcement came the same day the nation’s financial watchdog issued a business improvement order to the TSE and its parent, Japan Exchange Group, aimed at prompting countermeasures that will prevent a recurrence and, in turn, rebuild trust among global investors.
The move comes as the benchmark 225-issue Nikkei average closed above 26,000 last month for the first time in some 29 years, driven by hopes for coronavirus vaccine development and a pickup in economic activity.
Japanese companies have been beating analysts’ earnings expectations by the widest margin in almost three years, Bloomberg reports, adding to the appeal of local stocks at a time when brokers are expecting a return of foreign investors after heavy selling.
The expectations came ahead of a sharp rebound in global equities after unprecedented stimulus from the Federal Reserve in March spurred the biggest shift in Japanese fund flows in seven years. Investors in Japan sold foreign shares worth ¥3.91 trillion ($37.7 billion) in the six months ended Sept. 30 — the most since 2013.
The selling was possibly driven by profit taking, said Kiyoshi Ishigane, the chief fund manager at Mitsubishi UFJ Kokusai Asset Management Co. in Tokyo. Despite some progress in developing vaccines for the coronavirus, “there is still concern that the pandemic won’t come to an end any time soon and that the world economy will have a second bottom.”