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TOKYO, Jan 20 (Reuters) – Tokyo Commodity Exchange Inc has decided to extend trading hours of all derivatives contracts later this year to boost liquidity by inviting more foreign participants, its president said on Tuesday.
The extented trading hours will commence when Japan’s main commodity market launches upgraded trading systems, TOCOM President Masaaki Nangaku said at a regular news conference.
The exchange, on which gold, platinum, rubber and gasoline futures are heavily traded, plans to replace the slower, existing trading systems on May 7.
“Our purpose of extending trading hours is to increase liquidity, inspire more hedging needs and invite more participants from abroad,” Nangaku said.
TOCOM has struggled to boost trade for several years, in stark contrast with rivals overseas that have managed to lure investors seeking alternative assets, though the global financial crisis has dimmed interest in commodities.
Nangaku said Tadashi Ezaki, who in his last job as head of Shoko Chukin Bank prepared the state-backed bank’s privatisation, would join as special advisor this week to accelerate reforms of the recently demutualised exchange.
Turnover on the exchange stood at 41 million contracts in 2008, or 97.5 trillion yen in value. Trading volume was down more than 10 percent from 2007.
Currently, all TOCOM contracts start trading at 9:00 a.m. (0000 GMT) but halt trading for the lunch break between 11:00 a.m. (0200 GMT) and 12:30 p.m. (0330 GMT). The afternoon session ends at 5:30 p.m. (0830 GMT)
Under the new trading systems, TOCOM’s day session will start at 9:00 a.m. and end at 3:30 p.m, followed by a night session starting at 5:00 p.m., when Singapore’s over-the-counter market for oil and oil products opens.
The night session is for all contracts but rubber futures will end at 11:00 p.m. (1400 GMT). The extended hours would cover the full time zone of Asia and Europe, and partly overlap with trading hours in New York.
For trading in rubber futures contracts, the night session will end at 7:00 p.m. (1000 GMT). The contract is peculiar in terms of its customer base as Asian users account for 35 percent of its open interest, Nangaku said.
Source: Reuters