Japan Commodity Exchange Halts as Heavy Trading Overwhelms
The Tokyo Commodity Exchange (TOCOM) has twice halted trading since early Thursday morning, with at least one of the interruptions caused by heavy trading orders following Donald Trump's surprise U.S. presidential election victory.
The exchange - which trades gold, crude oil and rubber, among other commodities - halted night trading more than two hours earlier than usual at 3:15 a.m. Japan time (1815 GMT Wednesday), after orders surged and computers almost reached maximum processing capacity, it said.
It then stopped trading between 10:00 a.m. and 10:45 a.m., but did not give a reason, citing an ongoing investigation. It also said the halt in night trading may have had an impact.
The earlier move affected all products apart from rubber, which closes earlier. TOCOM initially started day trading as usual on Thursday.
Republican Trump won a shock victory in this week's U.S. presidential election, sending worldwide markets into gyrations.
A TOCOM spokesman said the interruptions came although TOCOM introduced a new trading system developed by a unit of Japan Exchange Group (JPX) in late September that doubled its order processing capacity. He declined to say what the current capacity is.
"Because of the U.S. presidential election, the number of orders almost reached the limit," he said. "If trading had continued, it could have led to a sudden system down, so we halted just before it reached the limit."
He said TOCOM would consider raising capacity to avoid future interruptions.
TOCOM's trading day consists of a night session followed by a daytime session.
Turnover on Wednesday reached 291,499 contracts, with the majority of trades coming during the daytime session as TOCOM products slumped as Trump's win became clear. The futures then began rebounding overnight as U.S. stocks began bouncing back from post-election losses.
Wednesdays' volume was more than triple the October average and was the highest since April 2013, a TOCOM spokeswoman said.
By Thursday's night or early morning session when the first halt occurred, volumes had dropped to 105,398 contracts traded, but it was the amount of orders that prompted the early end to trading, she said, declining to give a figure for those.
In Wednesday's trading, turnover of the exchange's benchmark 1 kilogram gold contract <0#JAU:> was the heaviest with 117,754 traded, followed by Dubai crude oil <0#JCO:> at 64,448, according to TOCOM's website.
Thursday's turnover for gold and Dubai oil was 70,103 and 59,613 respectively.
Total volume on Thursday fell about a third from the day earlier to 193,513.
Reporting by Osamu Tsukimori
