Japan Bourse Said Planning Not to Expand Tick-Size CutAnna Kitanaka and Toshiro Hasegawa
Japan Exchange Group Inc. will probably decide against cutting trading increments for more listed companies, a person familiar with the matter said.
The bourse operator allowed smaller tick sizes for the large companies that comprise the Topix 100 Index in July. While liquidity increased for 30 of them that already excelled in that area, it didn’t get better for those that needed it more, said the person, who asked not to be identified before an official announcement. The exchange sees limited benefits to expanding the program, the person said.
The changes in July, which introduced decimalized prices, were the second in a three-part plan to offer better liquidity and shorten waiting times to process orders. The exchange reduced tick sizes on some shares in January, while keeping the smallest increment at 1 yen. The bourse has been analyzing the impact of the smaller ticks before announcing a decision next year on whether to expand the program.
Topix 100 members with shares that cost between 1,000 yen and 5,000 yen now trade in 0.5 yen price movements, down from 1 yen. This includes Honda Motor Co. and Japan Tobacco Inc. Shares priced at less than 1,000 yen, such as Mizuho Financial Group Inc., now move in 0.1 yen bands, 1/10 of the previous size. Investors in Japan are already able to trade in smaller increments using the country’s two alternative platforms that display prices, SBI Japannext and Chi-X Japan Ltd.