Merrill Lynch to quit trading in Japanese power

Merrill Lynch & Co, the US securities firm that's being bought by Bank of America Corp, will cease to trade electricity in Japan in January after the company failed to meet its expansion targets for the business.

Merrill will surrender its membership of the Japan Electric Power Exchange (JEPX) on 16 January. Tsukasa Noda, spokesman for Merrill Lynch Japan Securities Co., confirmed plans to exit the power business without elaborating.

The number of staff on Merrill's Tokyo commodities desk, will be cut to one or two from the five people working there now, the two company officials said. Spokesman Noda declined to specify how many people work there or whether jobs would be cut from the division, which opened in 2006.

Merrill Lynch became the first foreign member of JEPX in March 2007. At the time, some commentators said its entry was a potential wake up call for the tightly protected Japanese utility sector. The exchange, which was formed in 2005 and currently has 40 trading members, including Tokyo Electric and Tokyo Gas Co., enables utilities and new market entrants to trade 1,000 kilowatt-hour lots of electricity for delivery the next day or monthly as far as a year ahead.

But there has been no significant growth in electricity trades on the JEPX and power delivered via the exchange accounts for less than only 0.03 per cent of Japan's total needs.