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Trading in Russia-linked financial products halted in Japan

  • March 2, 2022
  • , Jiji Press , 9:24 p.m.
  • English Press

Tokyo, March 2 (Jiji Press)–Many financial companies have stopped accepting orders for Russia-related financial instruments in Japan in line with international economic and financial sanctions against Russia over its invasion of Ukraine.

Some investors are likely to incur losses as there are many products that cannot be sold immediately even if their prices fall sharply. The negative impact may spread further as the Russia-Ukraine crisis is likely to prolong.

From Tuesday, Daiwa Asset Management Co. stopped accepting buying and selling orders for Daiwa Russia Equity Fund. The product is touted as a way to invest in Russian companies expected to grow thanks to the country’s rich natural resources.

The fund’s net asset value per investment unit, however, has tumbled 60 pct since the beginning of the year.

With the Moscow Exchange closing stock trading, “we have no prospect for resumption” of transactions, a Daiwa Asset official 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 Friday after the Japanese government banned the new issuance and transactions of new Russian sovereign debt in Japan.

“It’s extremely unusual for transactions to be halted due to a war,” a Mitsubishi UFJ Kokusai Asset official said. “It’s natural our customers get confused.”

The company will tell its customers as soon as it figures out when the trading can be resumed, the official added.

Since Thursday, Nomura Asset Management Co. has been suspending transactions of its exchange-traded fund linked to the Moscow Exchange’s key dollar-denominated RTS index.

On the currency market, the ruble has plunged mainly due to the expulsion of some Russian banks from the SWIFT global payment network and measures by Japan and some other countries to restrict the Russian central bank’s access to foreign exchange reserves. SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication.

Amid sharp fluctuations in the ruble, SBI Fxtrade Co. is halting new transactions in the currency from Monday. It is only accepting settlement orders.

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