Japan's over-the-counter market was bombarded with $617 billion of erroneous stock orders in dozens of Asia's biggest corporations. They were canceled before they could be executed. More than 40 requests to transact shares totaling 67.78 trillion yen ($617 billion) -- greater than the size of Sweden's economy -- were voided at 9:25 a.m. in Tokyo before they could be matched, according to data compiled by Bloomberg from the Japan Securities Dealers Association. JSDA received an error report from a member and is still confirming what happened, according to an official who asked not to be named as he isn't authorized to discuss individual cases. The biggest order was for 1.96 billion shares of Toyota Motor Corp. (7203), or 57 percent of outstanding shares in the world's biggest carmaker, for 12.68 trillion yen through an off-exchange transaction. Toyota declined to comment. Other stocks with cancellations included Honda Motor Co., Canon Inc., Sony Corp. (6758) and Nomura Holdings Inc. (8604) Mistakes occur periodically on the world's electronic trading venues. In 2009, UBS AG (UBSN) accidentally ordered 3 trillion yen of convertible bonds issued by Capcom Co. In 2005, Mizuho Financial Group Inc.'s securities unit was unable to cancel a mistyped order for J-Com Co., costing the bank 27 billion yen at the time. Price Discrepancies Orders to buy or sell stock are submitted and withdrawn all the time in electronic markets, where computerized strategies are used by arbitragers to profit from price discrepancies and by market makers to anticipate demand. The sheer size or today's cancellations took the traders by surprise. "I've never heard of orders this big being canceled before," said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd., which oversees about $474 billion. "There must have been an error." One of the biggest American market makers, Knight Capital Group Inc., was pushed to the brink of bankruptcy in August 2012 when its computers spewed mistaken orders on to U.S. markets. In that case, the orders found buyers and resulted in hundreds of millions of dollars in losses to the Jersey City, New Jersey-based firm. The company was later bailed out and sold. While no such losses were recorded today because the orders weren't filled, there should be an explanation to alleviate concerns, Sera said. "I don't think the order could've been executed," said Sumiyo Yamamoto, vice president at Jefferies Japan Ltd. "With OTC trades, you can cancel anytime during market hours. Also, the amount was huge, so someone would've noticed before the market closed." From Bloomberg
