Japan's E*Trade makes new fee cuts to fight Nomura

TOKYO, May 9 (Reuters) E*Trade Securities Co. Ltd., Japan's biggest online brokerage, announced its second fee reduction in less than a month on Tuesday in a move to counter Nomura Holdings Inc.'s soon-to-be-launched Internet trading business.

E*Trade said it would offer the lower fees, which match or undercut prices announced on Monday for Nomura's new venture, Joinvest Securities, until at least Aug. 31, signalling its willingness to fight a price war to defend its market share.

''We will respond flexibly to moves by other companies to ensure that our fees remain at the lowest level in the industry,'' E*Trade said in a statement, adding that it would consider extending the new discounts beyond the end of August if needed.

Nomura, Japan's biggest brokerage house, on Monday unveiled a fee structure for Joinvest that would have seen the new firm, which is to begin taking orders on May 28, charge about 15 percent less than E*Trade and other top competitors for some trades.

Joinvest hopes to attract 500,000 account-holding clients in its first 10 months in business, putting it on a par with Rakuten Securities and Matsui Securities Co. Ltd., the country's second- and third-biggest online brokers by market share.

E*Trade has about 1.16 million online clients.

Japan's longest economic expansion since the 1980s has drawn individual investors back to the market in force, helping push the Nikkei share average up 40 percent last year.

Retail investors now account for 40 percent of the activity on Japan's major exchanges, and they make four-fifths of their trades online. That has generated fierce competition among discount online brokers and drawn larger conventional firms such as Nomura into the field.

E*Trade announced in April that it would eliminate fees on daily trades worth less than 100,000 yen (4) beginning on June 1, matching an identical step by rival Matsui earlier this year.

On Tuesday, E*Trade said it would reduce fees on more expensive trades to the same levels as Joinvest or lower during the special-offer period.

Daily transactions worth between 500,000 and 1 million yen, for example, will cost 800 yen (.15), down from the current level of 945 yen.

Separately, Rakuten Securities President Atsushi Kunishige told a news conference that the firm may soon implement fee cuts announced last year but delayed due to trading-system problems.

At the same news conference, parent Rakuten Inc., an Internet retailer, said higher revenues at its brokerage unit contributed to a four-fold rise in the group's quarterly net profit to 3.95 billion yen (.3 million).

REUTERS MP PM1633