GMO Click securities, the world’s largest retail forex broker by volume had another great month in November. Overall FX volumes at the Japanese broker were 8.4% higher to $384 billion for the month. GMO’s OTC FX unit registered $375.7 billion in volume which compared to $345.4 billion in October, and was the highest total since March 2012.
The rise in volume at GMO Click occurred as volatility in the Japanese Yen rose last month. The effects on volumes were previously seen in earlier reports from the TFX and CME which showed a spike higher in yen trading. Interestingly though, GMO Click’s exchange traded FX business was slightly lower on the month, even as Click 365 volumes rose at the TFX. However, this may be more to do with GMO Click spending more of its efforts on marketing its OTC versus exchange traded products due to their higher expected profit margins.
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While the Japanese forex market appeared to be on a downward spiral earlier this as new regulations restricting margin use were passed, broker’s appear to be adjusting to the new environment. Reacting to the changes, Japanese brokers have decreased spreads, launched new products (see earlier post about Invast), and consolidated operations. While it may be too early to definitely say the worst is over, it does appear that at least volume wise, the new policies are working.