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Mon, Jan 23, 2006 - Page 12 News List

Tokyo exchange boosts trading capacity

NEW MEASURES After weekend tests the exchange said that it now can handle up to 5 million trades per day, but will continue to shorten afternoon trading by 30 minutes

AP , TOKYO

The Tokyo Stock Exchange (TSE) announced yesterday it will boost its trading capacity, but said it would keep shortened trading sessions after a flood of orders forced the bourse to curtail trading last Wednesday.

Following successful system tests over the weekend, the exchange -- the second-biggest globally -- can now handle an absolute limit of 5.0 million transactions daily, up from the current 4.5 million, TSE said in a statement.

The exchange will continue to shorten the afternoon session by 30 minutes, and will shut down all trade if the number of trades hits 4.5 million, the statement said.

The measures follow a turbulent week at the exchange, triggered by investor jitters over a widening investigation into a high-profile Internet startup.

News that Livedoor Co was under investigation for violating securities laws led to huge sell-offs earlier in the week, forcing the TSE to halt trading 20 minutes early on Wednesday -- the first time the bourse stopped trading for capacity reasons since it moved to a fully computerized trading system in 1999.

Fearing similar disasters, the exchange has since delayed the start of its afternoon sessions by 30 minutes.

The chaos comes as the Tokyo exchange is still reeling from a computer glitch that forced it to suspend trading for all but the final 90 minutes in November.

Top government officials have roundly criticized the exchange for its blunders, and urged it to improve its operations 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.

"TSE must realize they're a global market ... I urge the exchange to immediately build a system that does not bring disgrace to Japan," Financial Services Minister Kaoru Yosano said yesterday on a program aired by public broadcaster NHK.

He has advised TSE executives to invest generously in system upgrades to boost trading capacity as soon as possible, Yosano said.

TSE chairman Taizo Nishimuro has said the bourse intends to boost its capacity to some 8 million transactions by the end of the year.

Trading volume, a different measure, is usually a far higher number -- often in the billions -- because each transaction typically involves many shares.

The exchange has 2,352 listed companies, including 28 from outside Japan.

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