TSE sees bond trade plunge after rule change.
The Tokyo Stock Exchange (TSE), Japan's foremost securities exchange, Tuesday experienced a sharp decline in government bond trading on the first day of a deregulatory move that allows bond trading outside exchanges, TSE officials said. Much of the day's trade apparently went to the over-the-counter market where transaction commissions are lower. The decline was particularly evident in large-lot transactions of government bonds worth 10 million yen and more. After a turnover of 6.5 billion yen Monday, ''No orders whatsoever were placed'' Tuesday, a TSE official said. Small-lot transactions of government bonds also fell sharply, to just below 38 million yen from some 550 million yen Monday, even though the TSE reduced the size of tradable lots to draw trading. Commissions are an important source of income for the TSE, although it only accounts for a mere 0.5% of all bond trading conducted in Japan each year, totaling some 3,400 trillion yen. With stock trading also seen certain to be undertaken increasingly off the exchange as a result of rising computerized trading, the TSE will likely feel pinched financially, industry sources said.
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|Publication:||Japan Weekly Monitor|
|Date:||Dec 7, 1998|
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