The Tokyo Stock Exchange will increase its trading capacity to 5 million transactions next week but continue its emergency measure to shorten trading hours for the time being, exchange officials said Friday.
Chairman Taizo Nishimuro also said the exchange, Asia’s biggest, would soon decide whether it would delist Internet startup Livedoor Co., the company at the center of a criminal probe that sparked a big sell-off in Japanese stocks earlier this week.
The Tokyo bourse, which was forced to shorten trading sessions three days this week following a flood of trading orders, will delay the start of the afternoon session by 30 minutes for an indefinite period, Nishimuro said.
“The shortened trading measure will be continued for the time being,” exchange spokeswoman Akie Koike quoted Nishimuro as telling reporters Friday afternoon.
Nishimuro had said Thursday that the bourse intends to boost its capacity to some 8 million transactions by the end of the year.
The exchange’s computerized trading system has an absolute limit of 4.5 million transactions. But surging trading volume this week made it clear that ceiling was too low, forcing the bourse to cut short sessions for three straight days to avoid a system overload.
As the market plunged Wednesday amid jitters about the Livedoor investigation, the exchange pre-emptively halted trading 20 minutes early, the first time it stopped trading for capacity reasons since it moved to a fully computerized trading system in 1999.
Fearing similar disasters Thursday and Friday, the exchange delayed the start of its afternoon sessions on each day by 30 minutes.
The problems are a huge embarrassment for the exchange and for a country that prides itself on its orderliness and technological prowess.
Top government officials have roundly criticized the Tokyo exchange and urged it to improve its operations so as to win back investor confidence for the sake of the entire national economy.
Some fear the market’s troubles could also drive away investors just as they have been drawn back to Japan amid signs of a long-awaited economic recovery.
“There has been criticism from both within Japan and overseas. Winning back TSE’s confidence is important for the entire Japanese economy,” Financial Services Minister Kaoru Yosano told reporters Friday.
“The TSE must significantly boost investment to improve its system reliability and capacity to handle trades,” he said.
The benchmark Nikkei 225 index, which hit five-year highs last week after surging 40 percent last year, plunged nearly 6 percent on Tuesday and Wednesday as investors got spooked about the investigation into possible fraud at Livedoor Co., a prominent Internet company that also has bought up dozens of companies.
The market has recovered some since then. On Friday, the Nikkei gained 0.41 point — a negligible percentage change — to finish at 15,696.69 points.
Livedoor was due to submit the findings of an internal investigation to the Tokyo Stock Exchange on Friday.
The price of Livedoor’s shares was not quoted early Friday because there were too many sell orders, said Tokyo Stock Exchange spokeswoman Ayuko Fujiwara. On Thursday, the stock was quoted at 416 yen ($3.61), down 40 percent from its Monday price of 696 yen ($6.03).
The exchange has 2,352 listed companies, including 28 non-Japanese firms.