“Nikkei 225 Stock Average futures volume plunged more than 90 percent today as a software error forced a halt to Osaka trading of some derivatives, the first outage for Nasdaq OMX Group Inc. (NDAQ) technology installed in 2011.
Trading of Nikkei 225 options and futures in Japan resumed at 2:10 p.m. The failure began at 10:20 a.m. when a program processing index options stopped responding, Osaka Securities Exchange Co. Managing Director Yoshinori Karino said at a press briefing. The volume of March contracts traded plummeted to 5,718, about 7 percent of the 14-day moving average, according to data compiled by Bloomberg.
Osaka is the only venue in Japan where Nikkei 225 futures change hands. The trading system that failed today, known as J- Gate, uses technology from Nasdaq OMX. The Japan bourse, formed by the merger of Osaka Securities Exchange Co. and Tokyo Stock Exchange Group Inc., which suffered two trading-system halts last year, plans to adopt J-Gate for all derivative transactions by March 2014, it said in October.
“There’s nothing positive about the troubles we saw today for the stock market,” Hidehiro Tomioka, who helps oversee $1.3 billion in Japanese equities at Manulife Asset Management (Japan) Ltd. in Tokyo. “It’s going to breed distrust among global investors, who are keeping a close eye on Japanese stocks. Generally speaking, it’s easy for there to be problems during and after a merger. It’s important that they clarify what the problem was.”
