But TSE chairman and president Taizo Nishimuro told reporters that the exchange did not intend to pay Mizuho for the "fat finger" trading error, where a dealer mistakenly offered to sell 610,000 shares for one yen each in recruiting company J-Com, instead of one share for Y610,000.

The brokerage was forced to buy back the shares from market investors at a massive loss and booked a one time charge of Y40.7bn in the third quarter of last year following the incident - around the same amount it is demanding from the exchange.

The TSE later admitted that a problem with its own dealing system prevented the trader from cancelling the erroneous share-sale order.

But Nishimuro has said that the exchange did not intend to pay Mizuho compensation. The two parties have been in talks over compensation since the error occurred.

A Mizuho spokesman told Reuters reporters that the brokerage was still holding talks with TSE and had not yet decided whether to take the matter to court.

The Mizuho trade claimed the job of TSE president Takuo Tsurushima - who resigned alongside IT head Sadao Yoshino and managing director and executive officer Tomio Amano - following this incident and an earlier systems failure at the exchange.

Foreign banks including UBS, Morgan Stanley and Credit Suisse reportedly made the largest profits from the erroneous trade and were criticised by some Japanese government ministers for exploiting the mistake.

Around 50 foreign and Japanese investors later agreed to donate a combined Y20bn to the Japan Securities Dealers Association (JSDA), which set up a fund to improve the TSE's trading system.