Spike in JGB Futures Not Caused by Mistaken Order, Tokyo Exchange Says

A spike in government bond futures after the Bank of Japan unexpectedly added to its asset purchases wasn’t the result of a mistaken order, according to the Tokyo Stock Exchange.

The price of 10-year bond futures for March delivery surged briefly 143.37, rising by the Tokyo Stock Exchange’s daily limit of 1. The exchange didn’t receive notification that any orders were misplaced, spokesman Naoya Takahashi said in a phone interview. A decision was made not to halt trading because the price immediately retreated, Takahashi said.

The stability of the exchange’s trading systems is under scrutiny as Tokyo and Osaka Securities Exchange Co. move closer to a merger that was proposed partly in order to save computer costs. A glitch at the Tokyo bourse on Feb. 2 halted trading for 2 1/2 hours in 241 securities including shares of Sony Corp. and Hitachi Ltd., the worst disruption in six years.

The spike lasted for a few seconds at 12:51 p.m., about seven minutes after the Bank of Japan unexpectedly added 10 trillion yen ($128 billion) to an asset-purchase program.

Stocks rose and the yen weakened against the dollar after the central bank expanded stimulus for the first time since October to revive an economy that shrank an annualized 2.3 percent last quarter.

The Tokyo Stock Exchange, which handles trading in bond futures, allows investors to notify the bourse when mistakes are made in placing orders, Takahashi said.

To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net