Interruption of trade in Russian-related financial products in Japan

Many financial firms have stopped accepting orders for Russia-related financial instruments in Japan, in line with international economic and financial sanctions against Russia following its invasion of Ukraine.

Some investors are likely to suffer losses because many products cannot be sold immediately even if their prices fall sharply. The negative impact could spread further as the Russian-Ukrainian crisis is likely to drag on.

Since Tuesday, Daiwa Asset Management Co. has stopped accepting buy and sell orders for Daiwa Russia Equity Fund. The product is promoted as a way to invest in Russian businesses that are expected to grow thanks to the country’s rich natural resources.

The fund’s net asset value per investment unit, however, has fallen 60% since the start of the year.

With the Moscow stock exchange closed, “we have no prospect of a resumption” of trading, an official at Daiwa Asset said.

Daiwa Russia Equity Fund holders cannot even settle their unrealized losses.

Mitsubishi UFJ Kokusai Asset Management Co. has stopped taking orders for Short-Term Russian Rubles Bond Open, a fund investing in Russian government bonds.

The company made the move last Friday after the Japanese government banned new issuance and transactions of new Russian sovereign debt in Japan.

“It is extremely unusual for transactions to be halted due to war,” an official at Mitsubishi UFJ Kokusai Asset said. “It is natural that our customers are confused.”

The company will notify customers as soon as it knows when trade can resume, the official added.

Effective Feb. 25, Nomura Asset Management Co. suspended trading of its exchange-traded fund linked to the key dollar-denominated RTS index of the Moscow Stock Exchange.

In the currency market, the ruble plunged mainly due to the expulsion of some Russian banks from the SWIFT global payment network and measures taken by Japan and some other countries to restrict the Russian central bank’s access to reserves. change. SWIFT is the abbreviation of Society for Worldwide Interbank Financial Telecommunication.

Amid sharp fluctuations in the ruble, SBI Fxtrade Co. halts new trading in the currency starting Monday. It only accepts settlement orders.

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