Japan commodity bourse 2010/11 loss wider than expected

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Tokyo Commodity Exchange said on Tuesday it expects a recurring loss of around $9,5 million on a parent basis for the financial year that ended on March 31, nearly double the loss initially forecast.

Japan’s largest commodity exchange had initially forecast a recurring loss of about $4-$4,75 million for fiscal 2010/11.

For the month of March, trading in oil products and precious metals increased from February as global markets surged on tensions in the Middle East.

But the destructive earthquake and tsunami that devastated wide areas in northeastern Japan on March 11 caused a sharp drop in activity on the exchange, weighing on trading volumes.

“Had it not been for the earthquake, we would have done better and trading volumes for the entire fiscal year could have turned positive from a year earlier,” Tocom President and CEO Tadashi Ezaki told a regular news conference.

Trading volume for fiscal 2010/11 stood at 28 003 737 lots, down 0,1 % from a year earlier.
In the few days immediately after the quake, open interest shrank sharply, probably due to foreign investors closing positions, Ezaki said.

Open interest at the end of March stood at
290 274 lots, falling below
300 000 for the first time in about six months.

“Trading regained some calm in the last few days of March and open interest is on the rise,” Ezaki said, but added that the outlook remained uncertain, pending developments at Tokyo Electric Power Co’s Fukushima Daiichi nuclear plant, where engineers are struggling to control radiation leaks and prevent further reactor meltdowns.