In an unprecedented move by a major global market, the Tokyo Stock Exchange was forced to temporarily suspend trading shortly before Wednesday's close as a wave of panic selling overwhelmed the exchange's computer systems.
It is thought that the fallout from the raid on internet portal Livedoor by Japanese prosecutors on Monday triggered the sell off, and the TSE was forced to halt trading twenty minutes before the 3pm close yesterday as the number of orders and executions threatened to exceed its systems' capacity.
"Because there was a possibility that the number of orders and executions received would exceed the amount able to be processed by the system, Tokyo Stock Exchange today temporarily suspended trading of all equity, convertible bond, and exchange bond issues during the afternoon session," the TSE explained in a statement.
The TSE said that it "deeply apologized" for the inconvenience caused to investors and said that it was "determined" to continue its efforts to increase the capacity of its system.
Nonetheless, the exchange warned that "interference with the continuity of the system" may reoccur if the number of orders exceeds 8.5 million or the number of executions exceeds 4 million.
Taizo Nishimuro, president of the TSE, told a press conference that the situation was "totally unexpected".
"My guess is that Livedoor’s investigation news spooked individual investors and prompted them to sell broad-based stocks," he surmised.
When trading finished for the day, the Nikkei 225 index had plummeted by 464.77 points or 2.9% - the largest daily fall since April 2005.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment