The first major retail FX brokerage from Japan has come out with its clients’ volume numbers for the month of June, and the figure came out at $364.8 billion (¥37 trillion) – lower by just below 16% when compared to the month of May. Since Japanese traders are mainly keen in trading the Japanese yen crosses, the results are disappointing – while during the month of June we have seen some material pickup in the British pound and Euro volumes against the dollar, that certainly has not been the case with the yen.
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With the trend intensifying, we are very likely to see further consolidation continuing throughout the summer months, unless some geopolitical event triggers a sharp reversal in risk sentiment which could be seen as a Japanese yen positive. As the year advances, we will also be looking closely to assess where the Japanese central bank stands with its efforts to increase inflation. For now it has been largely helped by the sales tax hike, a base effect which will be nullified in April next year, when we are likely to see the first set of “true” inflation figures.