Japanese FX & Binary Volumes Show Mixed Results in November - FX in the Green

Currency traders in the world's most established market for retail FX trading, Japan, were more active in November on a month-over-month basis as compared to figures reported in October. Total volumes for the month reached $4.8 trillion, triggered by activity in the Japanese yen. Volumes in the binary options market were slightly lower in yen terms; During the month, the total value reached $464 billion.

Figures reported by the country's main derivatives organization, Japan’s Financial Futures Association (FFAJ), show that the vibrant month of November saw a rapid spike in the total value of FX trading volumes for the month. However, the declining yen against the US dollar has impacted the value in dollar terms. In October, members of the organization reported 503 trillion Japanese yen. Although November figures were higher by 15%, value of trades in October exceeded six trillion US dollars.

Japan's binary options market saw a slight drop in the value of activity during the month. Registered brokers saw the total value reach 55 billion yen, three percent lower than 57 billion yen in October. Again, due to the current weakness in the yen, monthly volumes for binary options in US dollar terms were $464 billion. The FFAJ's figures represent the closing of both long and short positions.

Binary options have grown sporadically in Japan since new regulations were introduced in 2013. The organization states that there are over 290 thousand accounts. However, the number of active trading accounts were 14,263, a decline from October's figures of 15,162. The highest number of active accounts traded during the month of September this year was when 16,315 people transacted in binary options.

Japan is the world's largest market for margin FX, financial traders in the country having been active on the back of rapid moves in the JPY. Recent GDP figures show that the world’s third largest economy has slipped back into recession, with the economy shrinking 1.6 percent in the third quarter.

Overall, the currency has been one of the worst performing major currencies against the greenback, the yen having slumped 30% over the last two years. The movements have been impacted directly by Japan's Prime Minister, Shinzo Abe, who, after being sworn in, implemented a number of policies that have backfired. Prime Minister Abe has deployed an economic policy of fiscal spending and structural reform.

Market analysts are pessimistic about the future of the yen, which could further push the currency into the danger zone, ranging 140 against the USD.

On the other hand, a weak yen is favored by Japanese corporates as it allows importers to increase their stock hold of Japanese products and services.