A year after the Tokyo Stock Exchange (TSE) extended its trading hours by 30 minutes, market players remain skeptical about the impact of this decision. The move was controversial from the start, and its effectiveness is now being questioned.
On November 5, 2024, the TSE pushed back its closing time from the traditional 3 p.m. to 3:30 p.m. This extension was implemented to enhance the market's resilience and ensure trading could continue for as long as possible following a system failure. The memory of a massive system glitch in 2020, which suspended stock trading for an entire day, loomed large in the minds of market participants.
At the time, market players expressed hope that the extended hours would revitalize trading, as it increased the trading day by a significant 10%. However, the results have not met expectations. The TSE estimates that the daily trading value increased by only 5% due to the extension, falling short of the anticipated impact.
But here's where it gets interesting: the TSE's estimate of a 5% increase in trading value is being met with skepticism. Market participants argue that other factors, such as market trends and investor behavior, may have contributed to this slight increase, rather than the extended trading hours alone.
And this is the part most people miss: the extension was not just about increasing trading time. It was also a strategic move to enhance the market's resilience and ensure continuity in the face of technological failures.
So, while the impact on trading value may be debatable, the extension serves a broader purpose in strengthening the market's infrastructure.
What's your take on this? Do you think the TSE's extension of trading hours was a wise move, or is it a case of too little, too late? Feel free to share your thoughts and insights in the comments below!
