The month of December continued to be a quiet for the Asia Pacific giant as traders slowed down trading.
December FX Futures volumes:
The total trading volume of Exchange Forex Margin contracts (Click 365) was 7,233,569 decreasing 24.8% in comparison to that of the prior year comparable month, and decreasing 31.3% in comparison to that of the prior month, and the average daily trading volume was 328,878.
FX Futures on the TFX have an average daily trade volume of around $10-12 billion.
Volumes for 2011:
The total trading volume of Exchange Forex Margin contracts in 2011 was 136,658,356 , increasing 24.3% in comparison to that of the prior year, and the average daily trading volume was 526,744 .
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Japan is the third largest financial centre for FX according to BIS reports, average daily trade in spot, swaps and forwards is around $285 billion. OTC spot volume is nearing the $100 billion a day figure. The USD JPY contract is considered to be the second most liquid pair accounting for around 19% in trade volumes.
The Yen has been under pressure as the financial crisis and natural disaster caused new lows not seen since World War 2. Japanese retail traders have been shorting the yen as it seems to be strengthening YOY, a strong Yen make japanese imports expensive. The USD JPY is currently trading at: 76.9700.
Japans FSA introduced new leverage rulings in Summer 2010, the leverage was capped at 50:1, statistics showed that trade volumes weren’t majorly impacted.
The next round of leverage changes were introduced in August 2011 where retail traders can trade a maximum of 25:1. japanese traders are known to be more conservative and risk averse however the growing number of ‘punters’ will be looking for outside opportunities.
The changes in leverage have put pressure on costs as brokers battle for clients, 2011 saw mergers and acquisition in the derivates broker world. FXCM and AVA FX made purchase and Alpari UK bought out CMS FX Japan. IG Markets purchase of FX Online hasn’t been so favourable as reported in their Annual Report.
Forexmagnates team conducted an in-depth study on Retail FX volumes in 2011, the detailed list included Japanese and non Japanese participation.
Forexmagnates is one of the most widely read FX magazines exclusively available in Japanese language.