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Japan financial watchdog orders Tokyo Stock Exchange to improve operations

Japan financial watchdog orders Tokyo Stock Exchange to improve operations

Photo taken Oct. 2, 2020, shows the Tokyo Stock Exchange. The bourse reopened normally the same day after trading in all shares was halted for the whole session the previous day due to a system glitch. (Kyodo) ==Kyodo Japan's financial watchdog on Monday issued a business improvement order to Tokyo Stock Exchange Inc. and its parent company, following a system failure in October that caused an unprecedented full-day trading suspension. With the order, the Financial Services Agency added to pressure on the bourse operator and its owner, Japan Exchange Group Inc., to take steps to restore international trust following the Oct. 1 disruption, the worst in the Tokyo market's history. TSE President and CEO Koichiro Miyahara stepped down to take responsibility for the outage. At a press conference, JPX CEO Akira Kiyota said his monthly salary will be halved for four months and pledged to prevent any recurrence of such failures. The directive calling for measures to prevent recurrences came at a time when Prime Minister Yoshihide Suga is trying to bolster Japan's status as a global financial hub while making efforts to attract more investment from abroad. It demanded that the two companies clarify their responsibility for the problem and submit a plan on how they will improve their operations. The agency said it will regularly check on the progress made based on the plan. FSA officials told a press conference that the order had to be issued given the magnitude of the impact that the failure had on Japan's capital markets. Before issuing the order, the agency looked into reports submitted by the exchange group and conducted on-site inspections from Oct. 23 at the two companies. The full-day shutdown, the first since the Tokyo bourse's trading was completely computerized in May 1999, stopped dealing in all equities listed on stock exchanges in Sapporo, Nagoya and Fukuoka. It is the fourth time that the financial watchdog has given such an order to the TSE. The last one was issued in August 2012 following a system glitch in that month that led to a temporary suspension of all derivatives trading on the bourse. The latest shutdown was caused by a settings error, which prevented an automatic backup from activating after a memory failure in the TSE's trading system. The shutdown also betrayed the TSE's inability to resume trading promptly in the event of an unexpected occurrence. The settings mistake was blamed on an outdated manual provided by Fujitsu Ltd., developer of the "arrowhead" trading system, but the TSE has said it was responsible for the outage as the market operator. As one of its preventive measures, the bourse, where about 3 trillion yen ($29 billion) is traded daily, has set up a panel of market professionals to craft new rules by March on how to resume trading in the wake of a serious shutdown. Related coverage: FOCUS: Race to boost financial hub status intensifies among Japan cities Financial regulators probe Tokyo bourse over outage Authorities plan inspection of Tokyo bourse over full-day outage

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Coronavirus

Japan sees record 462 cases of severe COVID-19 symptoms

Japan sees record 462 cases of severe COVID-19 symptoms

Japan saw the number of people with serious symptoms of coronavirus hit a record 462, the health ministry said Sunday, as the country grapples with a recent resurgence of the virus. The latest figure comes as Tokyo and the central Japan prefecture of Aichi are asking eateries in the capital and parts of Nagoya to shorten business hours from this weekend to fight the further spread of infections. The number of people with severe symptoms increased by 22 from Saturday, according to the Ministry of Health, Labor and Welfare. On Sunday, Tokyo reported 418 new cases of coronavirus. While the figure in the Japanese capital was down from 561 the previous day and a record 570 cases on Friday, it nonetheless remains high for a Sunday, when fewer cases are reported. The metropolitan government has raised its virus alert to the highest of four levels for the first time since early September. On Saturday, Tokyo kicked off a 20-day period during which establishments including restaurants that serve alcohol are requested to shorten business hours, with the metropolitan government to provide 400,000 yen ($3,800) in financial support to each business that complies. A similar call for shorter business hours also took effect in parts of Nagoya on Sunday. The Aichi prefectural government has requested eateries serving alcohol to close by 9 p.m. and also said it will give up to 400,000 yen to those that cooperate. The latest call, however, was not universally welcomed by businesses already reeling from the fallout of the coronavirus pandemic and pinning hopes on a pickup in demand during the year-end party season. "I will not comply with the request," said the 33-year-old manager of an Italian restaurant in Nagoya. He said he had closed his restaurant for about three months from spring and started offering take-out and delivery over the summer when the prefecture requested businesses to shorten their hours. After taking coronavirus countermeasures such as installing partitions in the restaurant, he resumed business in September and customers were just starting to return. The man was skeptical about the prefectural government's request, saying that restaurants are likely to find themselves in a situation when they are crowded anyway in popular timeslots, exposing customers to confined, close-contact settings. "Is there any meaning to (shortening) business hours?" he asked.    

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