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Last Updated: Tuesday, 24 January 2006, 15:15 GMT
Tokyo exchange to upgrade systems
Traders at the Tokyo Stock Exchange
The exchange was knocked out for four hours last November
The Tokyo Stock Exchange reportedly has plans to double its IT budget after disruptions to its trading service.

It has also announced the appointment of a technology chief, responsible for developing an enhanced trading system.

The bourse plans to spend at least 50bn yen (244.5m; $436.5m) in three years on upgrading its systems, Reuters said.

The exchange's systems closed 20 minutes early on 18 January after fraud allegations at internet firm Livedoor caused an overload of share selling.

Costly error

In December, the Mizuho Securities brokerage lost $333m when a trader hit the wrong button and placed an order selling 610,000 shares for one yen, instead of one share for 610,000 yen.

That debacle led to the eventual resignation of the former president of the Tokyo Stock Exchange, Takuo Tsurushima, after the bourse admitted that a fault in its computer system meant the mistyped trade could not be cancelled in time.

In November, trading was suspended for more than four hours after a computer glitch.

Takuo Tsurushima, former head of the Tokyo Stock Exchange
Takuo Tsurushima was forced to resign in December

The recent problems have raised concern that the exchange's computerised trading system is unable to cope with the increased processing volumes that have accompanied the market's recent surge to five-year highs.

Rising profit

On Tuesday, it announced that this rise in volumes had boosted its net profit by 99.5% in the nine months to 31 December.

It said net profit came to 12.8bn yen, up from 6.4bn yen the year before.

The Tokyo Stock Exchange lists more than 2,300 companies and accounts for around 90% of stock trading in Japan.

It has plans to go public and list its own shares, but this strategy now faces a delay.

"System-related investment will account for the biggest part of our upcoming financial plans," the exchange's president, Taizo Nishimuro, told Reuters.

"Under the new business plan, our plan to list our own shares will have lower priority."

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01 Nov 05 |  Business

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