U.S. securities firm Merrill Lynch & Co. said Monday it will cease to trade electricity in Japan in January after failing to meet its expansion targets for the business.

Merrill will surrender its membership in the Japan Electric Power Exchange on Jan. 16, according to two company officials who asked not to be named because the decision hasn't been made public yet.

Tsukasa Noda, spokesman for Merrill Lynch Japan Securities Co., confirmed plans to exit the power business but would not elaborate.

Electricity traded on the exchange accounts for about 0.03 percent of Japan's electricity demand, according to data compiled by the bourse.

The country's 10 regional utilities, led by Tokyo Electric Power Co., account for more than 85 percent of retail power sales, even after the government opened 63 percent of the market to competition in 2005.

"Merrill perhaps found the power-trading business in Japan quite difficult to push ahead in because of little liquidity on the exchange," said Tatsuya Tsunoda, a senior energy analyst at Mizuho Securities Co.

Staffing on Merrill's commodities desk in Tokyo, which opened in 2006, will be cut after it ceases power trading, the two company officials said.

Spokesman Noda declined to give the number of people working in the commodities division in Tokyo and to comment on whether jobs would be cut.

The company's entry into Japan's electricity market in 2007 marked a first for overseas companies and financial institutions.