The first batch of official numbers related to foreign exchange trading volumes in September is out and the Tokyo Financial Exchange is reporting an unsurprisingly big spike in activity.
Throughout the last month of the third quarter, total trading volumes of Exchange foreign exchange margin contracts on Click 365 totaled 3,259,250, which is higher by 65.6% than August and 8.5% YoY. The average daily trading volume totaled 148,147.
As it turns out, Japanese traders have been very keen to trade the British pound crosses this month with activity spiking higher by 169% in the GBP/JPY pair and by 139% in GBP/USD.
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The Scottish referendum volatility was exacerbated by new multiyear highs in the Japanese yen cross, which was a very popular trade during the previous big period of carry trades accumulation between 2001 and 2007.
The most notable contributor of the biggest rise in activity was with the USD/JPY pair where trading grew 111.6% as the broad US dollar rally across the board resulted in new yearly highs and the pair closing in on ¥110 per dollar – a level unseen since 2008.
Antipodean currencies – the Australian and New Zealand dollars have traditionally shown solid activity as the current trend in interest rates in both countries is a preferred divestment destination for carry trade hungry Japanese investors.