Japan Exchange Eschews Smaller Tick Sizes for More Stocks

Japan Exchange Group Inc. decided against cutting trading increments for more listed companies, and reversed reductions for others, President Atsushi Saito said.

The bourse operator introduced smaller tick sizes for the Topix 100 Index in July, as the second step of a three-part plan to offer better liquidity and shorten waiting times to process orders. After analyzing the impact, JPX won’t broaden the reductions to smaller companies next year, Saito said at a regular press conference in Tokyo today.

The bourse will revert to 1 yen increments for Topix 100 companies with share prices between 3,000 yen and 5,000 yen, after piloting half-yen tick sizes for them since July. They include Honda Motor Co. and Japan Tobacco Inc. Stocks on the measure priced between 30,000 and 50,000 yen, such as SMC Corp., will trade in 10 yen bands, up from 5 yen. The changes are set to take effect in September.

The benefits of smaller tick sizes weren’t as apparent in shares with less liquidity, according to Saito. 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.

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