$617 Billion Wrongly Reported Trades Across Tokyo’s Terminals

by on October 2, 2014 9:21 am BST

Trading screens across Tokyo showing $617 billion of over-the-counter stock transactions were the result of a broker reporting error, according to the Japan Securities Dealers Association.

A brokerage completed off-exchange trades yesterday as planned and then incorrectly reported the size of them to JSDA, which disseminated that information to the market, an official at the industry association said by phone today, asking not to be named in line with the body’s policy. The trades were done at 9:25 a.m. Tokyo time yesterday and the erroneous reports, which misstated value as volume, were filed a minute later, according to information on JSDA’s website. They were canceled at 9:43 a.m. and replaced with accurate reports in the afternoon.

Traders used to about 2 trillion yen ($18 billion) of equities changing hands a day on the main board of Tokyo’s bourse were flummoxed to see off-exchange crosses for shares worth almost 68 trillion yen — greater than the size of Sweden’s economy and 16 times the Japanese over-the-counter market’s traded value for the entire month of August. The industry needs to develop measures to prevent such mistakes recurring, said Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co.

“It’s bad for Japan’s image,” Aoki said by phone today. “It doesn’t have a direct impact on asset prices, but it has a negative impact in that it makes people more distrustful of the market.”

The biggest canceled transaction report was for 1.96 billion shares of Toyota Motor Corp., or 57 percent of outstanding shares in the world’s biggest carmaker, for 12.68 trillion yen. Toyota declined to comment yesterday. Other stocks with erroneous order reports included Honda Motor Co., Canon Inc., Sony Corp. and Nomura Holdings Inc.