‘Fat-finger’ blamed for $617bn mistake on Japan’s stock market

A fat-fingered trade sent a spasm through Japan’s stock market on Wednesday, as a transaction worth almost Y68tn ($617 billion) was entered – and then swiftly cancelled – by an anonymous broker.

Traders said a rogue over-the-counter trade, equivalent to Argentina's gross domestic product in 2013, involving 42 stocks sparked alarm at 9.26am, when screens began to flash extraordinary volumes in blue-chips such as Toyota Motor, Nomura, MUFG and Honda.

“This was an OTC crossing, so it didn’t affect the market that much,” said Akihiro Ohara, head of sales trading at Société Générale Securities in Tokyo. “But the amounts were so huge, people were a little bit freaked out.”

The Japan Securities Dealers Association confirmed a Bloomberg report of the trade a couple of hours after the public market closed, explaining that one of its members had mistakenly entered a combination of volume and price, rather than simply volume, in its report of its trade.

OTC transactions have no limit, so the numbers blew out as high as 1.96bn shares in Toyota, according to Bloomberg – or 57 per cent of the outstanding shares at the world’s biggest carmaker.

At 9.43 the trade was cancelled, and at 1.44 the brokerage notified the JSDA of the transaction it had intended to make.

The gaffe topped others on Tokyo’s public market in recent years. In 2009 the stock exchange suspended trading in convertible bonds of Capcom, a video games maker, after UBS accidentally placed a giant Y30tn order for the company’s debt, instead of asking for Y30m.

The Financial Times