by Oz Golan, Tradency.
Japanese Brokers have recently reported a significant decrease of 35% on average for their monthly trading volumes between July and August. This was probably caused by the launch of the new regulations in the Japanese market, in which leverage was decreased to 1:50. On top of this, the competition for low spreads might have an additional negative effect on the broker revenues, as their margins are getting tighter on each trade.
This may have an effect on the market for only a short time, as I assume that Japanese brokers hope that client life time and profitability percentage of clients will increase as a result of the lower leverage, which will lead to longer client lifetime and larger volumes per account.
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* – Data by Yano Research Institute