One of the biggest trading errors of all time could have occurred today, as stock orders amounting to more than the size of Sweden’s economy were canceled in Japan.
At 9:25 a.m. Tokyo time, orders for shares in 42 companies totaling 67.78 trillion yen ($617 billion) were canceled, according to data compiled by Bloomberg from the Japan Securities Dealers Association. A representative at the organization wasn’t immediately available to comment.
The biggest order was for 1.96 billion shares of Toyota Motor Corp., or 57 percent of outstanding shares at the world’s biggest carmaker, for 12.68 trillion yen through an off-exchange transaction. Toyota declined to comment.
Other stocks with scrapped transactions included Honda Motor Co. (7267), Canon Inc., Sony Corp. and Nomura Holdings Inc.
“Fat finger” trading mistakes happen from time to time.
In 2009, UBS AG mistakenly ordered 3 trillion yen of Capcom Co. convertible bonds. Still, today’s scrapped trades were of a different magnitude.
“I’ve never heard of orders this big being canceled before,” said to Bloomberg Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd., which oversees about $474 billion in assets. “There must have been an error.”
Whilst no harm has been caused because the orders were canceled, there should be an explanation to alleviate concerns, Sera continued.
The Nikkei 225 Stock Average was little changed at 1:03 p.m. Tokyo time and shares of Toyota were up 1.2 percent as the yen weakened.
“It’s not rocket science that there was a fat finger here, but it reopens the question about accountability,” said Gavin Parry, managing director at Hong Kong-based brokerage Parry International Trading Ltd.
Off-exchange or over-the-counter trades are conducted directly between two parties without supervision of the bourse.
