The Tokyo Stock Exchange (JPXGY, Financial) is set to extend its trading hours to 5.5 hours starting November 5. The closing time will be pushed back by 30 minutes to 3:30 PM. It marks the first extension in trading hours since 1954, aimed at improving the likelihood of resuming trade after system failures and creating a more accommodating environment for overseas investors.
The new schedule will see the morning session run from 9 AM to 11:30 AM, followed by a one-hour lunch break, and then the afternoon session from 12:30 PM to 3:30 PM. Compared to major global markets, the extended hours align with Hong Kong's 5.5 hours but still fall short of New York's 6.5 hours and London's 8.5 hours.
To enhance transparency in forming closing prices, the exchange will introduce a "closing auction" system. In the final five minutes before the market closes, only orders to determine the closing price will be accepted. During this period, investors can submit orders at specified prices, but no actual transactions will occur, and stock prices will remain unchanged. The closing price will be finalized at 3:30 PM based on these orders.
Japanese brokerage firms are reportedly informing investors about potential opportunities brought by this change through video and promotional activities at branches. Iwai Cosmo Securities' online trading director indicated that extended trading hours could create more opportunities for investors and benefit brokerage firms by potentially increasing trading volume and additional business opportunities.
In a similar move, the New York Stock Exchange has announced plans to extend trading hours for its fully electronic exchange, NYSE Arca, to 22 hours a day, pending regulatory approval. The new hours will start at 1:30 AM Eastern Time and run until 11:30 PM, covering all stocks, ETFs, and closed-end funds listed in the U.S.
The New York Stock Exchange currently operates from 4 AM to 8 PM, with the busiest trading occurring from 9:30 AM to 4 PM. Analysts note that the extension aligns with trends where assets like U.S. Treasuries, currencies, and cryptocurrencies are already traded outside normal hours. This move may require financial firms to bolster early morning and evening trading, potentially affecting how earnings are reported, as companies typically release quarterly results after regular sessions, minimizing stock price impact. With extended hours, price volatility may increase, offering traders more opportunities.
