Tokyo bourse rejects calls for halt, to keep markets open
The Tokyo Stock Exchange and Japanese financial regulators plan to keep markets open despite a report that some foreign financial institutions are calling for Japan's stock market to halt trading.
The Nikkei news agency said officials from more than 10 non-Japanese financial firms held a conference call on Tuesday afternoon to discuss the situation in Japan, where markets have been rocked by an earthquake, tsunami and nuclear disaster over the past week.
Some participants called for the market to be closed immediately, Nikkei reported, citing people familiar with the discussion.
The report said that foreign firms were looking for a trading halt because the market was experiencing too much volatility, but did not elaborate.
The exchange plans no changes to its day-to-day operations, Tokyo Stock Exchange spokeswoman Yukari Hozumi told Reuters on Thursday.
We are open as normal today, and will be tomorrow. We have absolutely no plan to shorten hours or halt trading, Hozumi added.
Japan's stock market tumbled in the first two days of trading after an earthquake, tsunami and nuclear disaster rocked the country. But on Wednesday, stocks soared on record volumes, despite persistent worries about overheated nuclear reactors and high radiation levels.
The benchmark Nikkei index <.N225> was down 2.2 percent in mid-morning trading on Thursday.
Mike Cahill, who runs OCC, the U.S. clearinghouse for stock options, said banks might urge the TSE to close down operations if they were understaffed. Reuters has reported that foreign bank employees were racing to leave Japan due to safety concerns.
Yet representatives of several U.S. and European banks said they were unaware of any calls to halt trading activity. They noted that much of their trading and brokerage operations are performed online, allowing employees to perform trades on the TSE from off-site locations, such as Hong Kong.
HSBC said it is business as usual in Japan, adding that offices and branches in Tokyo, Osaka, Nagoya and Yokohama have remained open for business.
Representatives for other large, non-Japanese banks also said evoked similar sentiments.
CBOE Holdings Inc Chief Executive William Brodsky pointed out that markets in Japan rallied after Tuesday's decline, allowing investors to express their confidence in Japan's ability to recover.
When you run markets, you want to keep them open whenever possible, because you don't want to create panic that people who need to get out can't get out, said Brodsky, who was also formerly head of the World Federation of Exchanges. To voluntarily close a market makes no sense.
Exchanges have shut due to extreme circumstances, such as the New York Stock Exchange's closure after the terror attacks on Sept 11, 2001. But even after that disaster, a group of 700 traders from the American Stock Exchange relocated to the Philadelphia floor.
So unless it's clear that the nuclear situation is getting worse, there's no reason to stop trading, said Chris Allen, exchanges analyst at Evercore Partners.
The TSE's rules allow it to shut down trading if it is possible that brokerages accounting for more than 20 percent of volume cannot do business, Nikkei reported. The prime minister can also halt trading if there's a change of harm to the public good or investor protections, Nikkei reported.
The Nikkei report said TSE President Atsushi Saito wasn't prepared to shut the exchange down yet.
(Reporting by Lauren Tara LaCapra, additional reporting by Ann Saphir and Jonathan Spicer in Boca Raton, Florida, Timothy Kelly in Tokyo; Writing by Elzio Barreto; Editing by Bernard Orr and Anshuman Daga)
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