Binary Options Trading in Japan Continues Stagnating

Japanese retail traders are notoriously sophisticated, with the nickname of Mrs Watanabe frequently attributable to them.

Japanese trading volumes on the regulated binary options market which is overseen by the Financial Futures Association of Japan (FFAJ) continues its consolidation. While the regulator has provided a lot of protection to the end clients of Japanese brokers, its rigid regulations have also affected the popularity of binary options in the country.

While at the beginning of the binary options industry in Japan a number of brokerages benefited from massive volumes, the regulatory environment has stifled growth. In March the trading volumes across regulated brokerages dropped 22 per cent, while the number of active accounts dropped to the lowest level since June 2014.

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Number of active accounts across Japan's eight regulated binary options brokers, Source: FFAJ
Number of active accounts across Japan’s eight regulated binary options brokers. Source: FFAJ

According to the monthly data a total of 12,786 accounts have been active, with about 1950 new accounts opened during the month. The trading volumes figure amounted to $370 million, while the trading payouts that brokers credited to their clients amounted to $170 million.

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Looking at the charts we are seeing a trend that is confirming the consolidation of the binary options brokerage business in Japan. While the number of new accounts is steady, active trading accounts are nowhere close to the peak figures registered in 2014.

Monthly trading volumes statistics in JPY, Source: FFAJ
Monthly trading volumes statistics in JPY, Source: FFAJ

The monthly volumes figure is the second lowest on record since December 2015, with the profitability rates of clients actually increasing on both occasions.

Japanese retail traders are notoriously sophisticated, with the nickname of Mrs Watanabe frequently attributable to them. After some studies, a large number of retail investors turned out to be not so ordinary housewives.

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