The Japanese retail forex business of Compagnie Financière Tradition (CFT), Gaitame.com, lost 20 percent of revenues year-on-year in the third quarter of 2017. Decreased volatility, particularly in the Japanese yen market, is the main factor behind the decline..
Overall, Compagnie Financière Tradition reported its revenues increased by 2.5 percent in constant currencies and by 4.2 percent on an adjusted basis to CHF 187.5 million ($187.8 million). The company’s consolidated adjusted revenue totaled CHF 208.0 million ($208.4 million) versus CHF 202.5 million a year ago.
The Swiss financial firm’s interdealer-broking business which is the main revenue source for Compagnie Financière Tradition rose 5.3 percent on a yearly basis, therefore offsetting the decline at Gaitame.com.
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Looking at the first nine months of the year, CFT reported a consolidated revenue stream of CHF 600.8 million ($601.9 million). The figure is lower by 1.9 percent in constant currencies. Adjuster for FX, the consolidated revenue of the firm was about flat when compared to the first nine months of 2016.
Japanese Retail Forex Could be Set for a Rebound
The election of Japanese Prime Minister Abe for another term with a supermajority in the lower house of parliament is set to increase volatility in the Japanese yen. The constitutional majority which the new government of Abe enjoys should lead to material changes, that may affect the local currency market.
One of the main tasks of the new old prime minister is to appoint a new governor to the Bank of Japan. Abe is largely expected to continue supporting current BoJ chief, Harihuko Kuroda. With the implementation of the quantitative and qualitative easing program with yield curve control in 2014, the Japanese yen’s value fluctuated widely to reach as low as 125.87 in mid-2015.
Since then the Japanese yen has somewhat recovered as local investors have become less active on the currency market. Typically, Japanese retail forex traders become more active when monetary policy targets a lower exchange rate.