Tokyo Stock Exchange suspends day's trade after worst-ever system glitch

Share trading across Japan was suspended as smaller regional bourses in Nagoya, Fukuoka and Sapporo all use the TSE's system, leaving derivative-focused Osaka Exchange as the only market still running

Share trading in Japan was suspended for the entire day on Thursday after the Tokyo Stock Exchange suffered its worst technical outage in history, leaving investors unsure when trading will resume in the world's third-largest stock market.

The trading halt frustrated investors who were jockeying to buy back shares after the first U.S. presidential debate, and undermined the exchange's credibility just as new Prime Minister Yoshihide Suga makes the country's digitalisation a top priority.

"Stocks were expected to rebound quite strongly today after the presidential debate, so this system problem has poured cold water over that," said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"We still don't know the cause, and I don't think it's a big problem. But it does highlight the importance of going digital."

Share trading across Japan was suspended as smaller regional bourses in Nagoya, Fukuoka and Sapporo all use the TSE's system, leaving the derivative-focused Osaka Exchange as the only market still running.

Nikkei futures, which trade in Osaka, rose 0.4% on Thursday, in line with a rise in U.S. stocks overnight.

The TSE did not give a reason for the outage, but said it has no evidence of unauthorized access from outside the system. The Nikkei newspaper reported it was due to an unspecified hardware problem.

Tokyo's roughly $6 trillion market is the world's third-largest, after New York and Shanghai, according to data from the World Federation of Exchanges.

Thursday marked the first time that all share trading at the TSE was suspended for an entire day due to a system glitch.

Japan Exchange Group, which runs TSE and other bourses in the country, said it will update investors later on trading on Friday and beyond.

The TSE had been prone to technical troubles in the past and was notorious for sluggish trading, though problems have been relatively rare since it expanded its capability with the introduction of a new system in 2010.

In 2006, news of an accounting scandal at the then popular internet firm Livedoor Co sparked a massive sell-off. Unable to handle, the rush of orders from panicked investors, the Tokyo exchange had to curtail trading hours for three months.

That followed a complete shutdown of markets for three hours in November 2005.

"The timing is really just bad," Takashi Hiroki, chief strategist at Monex in Tokyo, said about the trading halt, adding many market participants were hoping to buy back their stocks or increase their holdings following the overnight rise on Wall Street.

"(The overnight rise) could have prompted a surge in stocks buybacks in early Japanese market. But the market was robbed of that chance."

The Nikkei fell 1.5% on Wednesday, its biggest decline in two months, as an acrimonious debate between U.S. President Donald Trump and Democrat Joe Biden highlighted the risk of an inconclusive outcome to the presidential election in November.