Typing Error Screws Up Japanese Stock Market

Sweet merciful crap. Botched Stock Trade Rattles Japan Market.

TOKYO - Japan's government rebuked the Tokyo Stock Exchange and one of the country's biggest brokerage firms Friday after a typing error caused Mizuho Securities Co. to lose at least 27 billion yen ($225 million) on a stock trade.

The glitch roiled the Japanese market, while jitters over the reliability of the exchange's trading system contributing to a 1.95 percent drop in the benchmark Nikkei 225 index Thursday.

[...] The trouble began Thursday morning, when a trader at Mizuho Securities tried to sell 610,000 shares at 1 yen (less than a penny) apiece in a job recruiting company called J-Com Co., which was having its public debut on the exchange. It had intended to sell 1 share at 610,000 yen ($5,041).

Worse still, the number of shares in Mizuho's order was 41 times that of J-Com's true outstanding amount, but the Tokyo Stock Exchange processed the order anyway.

Mizuho says another trader tried to cancel the order three times, but the exchange said it doesn't cancel transactions even if they are executed on erroneous orders.

By the end of the day, Mizuho Securities — a division of the nation's second-largest bank, Mizuho Financial Group, Inc. — had lost at least 27 billion yen. That total could rise, however, Mizuho Securities spokesman Hideki Sakuma said Friday, adding that the mishap was sparked by human error.

Japan's Financial Services Agency, the country's financial watchdog, began an immediate probe into what went wrong and how to prevent a repeat.

"In order to maintain the credibility of the Tokyo Stock Exchange, I very strongly want this issue to be resolved quickly," Economy and Banking Minister Kaoru Yosano told reporters Friday. "The first thing for the Financial Services Agency to do is to determine what happened in detail. Based on that, we will decide what is needed based on the rules and regulations."

"We need to think more about putting safety measures in place to prevent confusion," Prime Minister Junichiro Koizumi told reporters Friday.