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Last Updated: Monday, 12 December 2005, 11:34 GMT
Tokyo exchange boss might resign
Takuo Tsurushima, president of the Tokyo Stock Exchange
Mr Tsurushima has accepted the systems should have been better
Tokyo Stock Exchange president Takuo Tsurushima has said he may resign after admitting his computers helped cause a 40bn yen ($333m; 190m) trading error.

The exchange's systems failed to respond to four attempts to cancel an order to sell 610,000 shares for 1 yen instead of 1 share for 610,000 yen.

But the trade blunder has done nothing to spook foreign investors who now say Japan is well on the way to recovery.

The Nikkei index rose 2% on Monday to close at a five-year high of 15,738.70.

Compensation claims

Shares in Mizuho, the bank hit by the trading error, also rose 3% on hopes that the exchange will share its losses.

Japanese press reports claim that the bungled trade in shares of recruitment firm J-Com could end up costing Mizuho Securities, the brokerage arm of the bank, up to 40bn yen.

A Japanese man passing a board showing share prices
Mizuho staff tried to cancel the mistaken trade four times

It will have to pay cash in compensation to investors who bought the mistakenly offered J-Com shares.

After checking with Fujitsu, which supplies its computer systems, the Tokyo Exchange discovered that the trading system was unable to cancel "sell" orders while taking "buy" orders.

It failed to stop the mistaken Mizuho trade, which was offering 41 times as many J-Com shares as were actually available.

The exchange has apologised to Mizuho, and the brokerage said it will consider asking for compensation.

'Market confusion'

Last week's share trading error followed a computer breakdown on November 1, which shut down the world's second largest exchange for almost a whole day.

Accepting blame for both incidents, Mr Tsurushima said he would consider resigning.

"During such a brief period, there were two incidents that caused confusion to the market. I feel gravely responsible as someone in charge of the market," he said.

The exchange has now handed over a report to the Japanese Financial Services Agency.

The watchdog is expected to call on the exchange to upgrade its trading systems so that a similar error cannot occur in future.

Tokyo market admits system error
11 Dec 05 |  Business
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09 Dec 05 |  Business
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08 Dec 05 |  Business
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01 Nov 05 |  Business

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