Tokyo Stock Exchange frozen by outage

A blank stock board at Tokyo Stock Exchange (Eugene Hoshiko/AP)

Tokyo Stock Exchange officials are working to get trading back to normal by Friday after it halted for the day due to what they said was a hardware and systems malfunction.

There was no indication that the outage at the world’s third-largest exchange resulted from hacking or other cybersecurity breaches.

“We are extremely sorry for the troubles we have caused,” exchange president and chief executive Koichiro Miyahara told reporters.

Mr Miyahara and other exchange officials said a computer hardware device they called “machine one” failed and the backup “machine two” did not kick in, so stock price information was not being relayed properly.

The officials described the problem as a memory malfunction.

People are reflected on a blank electronic stock board in Tokyo (Eugene Hoshiko/AP)

They said that rebooting the system during a trading session would have caused confusion for investors and other market participants.

The Japan Exchange Group is the world’s third largest after the New York Stock Exchange and Nasdaq.

The outage also affected other, smaller stock exchanges in Japan.

The malfunction of basic hardware drew attention to vulnerabilities in the country’s digital systems. Newly appointed Prime Minister Yoshihide Suga has made upgrading such infrastructure a priority, viewing it as critical to Japan’s competitiveness.

Previous outages occurred when the huge “arrowhead” system created by Fujitsu to handle its electronic trading, which officials said involves some 350 servers, became overwhelmed with too many orders at one time.

That is what happened on October 9, 2018, according to a release on the Tokyo Stock Exchange’s website. But during that disruption, some backup systems for trading continued to function as was the case in earlier outages.

The exchange promised to investigate, conduct malfunction tests and change the system to ensure that a flood of orders would not cause the entire system to stop working. Several top executives of the exchange were penalised.

Despite such occasional disruptions, Mr Miyahara said the motto of the exchange was “never stop”.

Foreigners account for about 70% of all brokerage trading in the Tokyo exchange, both in terms of value and volume, so news of the outage left investors both in Japan and overseas wondering what happened.

“I think it is very regrettable that investors are limited in their trading opportunities because they cannot trade on the exchanges,” said Katsunobu Kato, the chief cabinet secretary.

He said the Financial Services Agency had instructed the Japan Exchange Group and Tokyo Stock Exchange to investigate the cause of the outage and fix it.