Update : Jan. 04, 2010
As explained in 'What are the 'daily price limits'?', the base price for daily price limits is determined by the previous day's closing price, except in cases where there is a special quote or a sequential trade quote, or it is an ex-dividend date. (Please see 'What is a 'special quote', and how does it work?' for more details about special quotes.)
Special quotes come into play when there is a marked imbalance between buy and sell orders. Sequential trade quotes come into play in the case of continuous increase / decrease in execution prices of a single order that exceeds twice the range of the special quote parameters from the previous price. If these situation persists at the close of trading, the special quote price or the sequential trade quote price is used instead of the closing price as the following day's base price.
Thus for example, if a stock's last recorded transaction at 14:50 is at 1,000 yen but there are no subsequent transactions, and due to a deluge of buy orders trading closes with a special bid quote at 1,030 yen, then the following day's base price will be 1,030 yen, not 1,000 yen. Thus trading the following day may take place between 730 yen and 1,330 yen.
Unfortunately some media organisations only give details of last executed prices, not last special quotes or last sequential trade quotes, leading to discrepancies between the limit prices they calculate based on their information and the official limit prices.
The right to receive dividends on stocks ends on the day following the shareholder confirmation date. Thus settlement of any stocks traded after this date are treated as ex-dividend. Due to the T+3 settlement cycle used at TSE, stocks are treated as ex-dividend as of the ex-dividend date, 2 business days before the shareholder confirmation date. (Please see 'How do investors exchange stock certificates and funds?' for more details of clearing and settlement.) As all stock prices on TSE are deemed to include dividends, an amount equivalent to the dividend must be deducted after the ex-dividend date.
|1||Previous day's closing price|
|2||Closing price on day 1|
|3||Ex-dividend date||Closing price on day 2 - dividend|
|4||Closing price on day 3|
|5||Shareholder confirmation date||Closing price on day 4|
|6||Closing price on day 5|
|7||Closing price on day 6|
Thus, shareholders who can receive dividends are investors who buy the share up to and including day 2, but not after day 3, the ex-dividend date. As of day 3, the stock price is reduced by the value of the dividend.
For example, for shares with a dividend of 5 yen per share, the base price on the ex- dividend date is the previous day's closing price minus 5 yen and the daily price limit is based on this revised base price. Thus if the previous day's closing price was 1,002 yen, the base price on the ex-dividend date will be 997 yen and trading may take place between 847 yen and 1,147 yen.