OTC and Exchange Traded FX Volumes in Japan Rebound Strongly

Foreign exchange volumes in Japan have benefited from market volatility in the final days of 2015

Foreign exchange trading volumes in Japan have roared back in December. The result is quite expected as we have already seen a rebound in the results of top retail brokers. Trading of exchange forex products has also rebounded sharply in December as we have seen a rise of about 49.7 per cent to ¥3.88 trillion ($33.2 billion).

Looking at the over-the-counter market, the figures rebounded by about 18 per cent in the final month of 2015 to ¥354.9 trillion ($3.02 trillion). This is yet another testament to the strength of the Japanese market and the remaining interest of the Japanese population to continue aggressively trading on the foreign exchange market.

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Looking at the year-on-year figures, the total foreign exchange trading volumes have increased by 38.4 per cent when compared to 2014, marking ¥5,584 trillion (47.6 trillion).

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Japanese Trading Volumes on the OTC Market, Source: FFAJ
Japanese Trading Volumes on the OTC Market, Source: FFAJ

While the numbers may seem staggering at first glance, its worth pointing out that the per million profitability of Japanese brokers is dramatically lower than in the rest of the world. This is primarily due to the big number of players in the market and substantial competition for the wallets of Japanese retail traders.

Another surprising outcome during the month has been the ongoing stagnation in the EUR/JPY pair. While other major Japanese yen crosses have rebounded sharply led by the CAD/JPY, AUD/JPY, CHF/JPY and GBP/JPY, trading in the the euro currency against the Japanese yen has remained stagnant during the month, barely moving by 2.91 per cent.

The EUR/USD continued to be the second most traded pair after the USD/JPY which is the undisputed leader. A notable spike in data was observed in the ZAR/JPY pair, explained with the new lows which the South African rand continued posting throughout the month of December alongside other emerging market currencies.

The figures released by the Financial Futures Association of Japan (FFAJ) include data from all 53 members of the organization.

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