TFX Sees FX Volumes Decline in March as Volatility Wanes

The move was largely dictated by the JPY, which failed to break out of tight trading ranges vs. several majors

The Tokyo Financial Exchange (TFX) has reported its latest trading volumes for the month ending March 2018. The exchange’s recent surge in FX volumes was stopped in March, resulting in a double-digit consolidation. The move was largely dictated by the JPY, which failed to break out of tight trading ranges vs. several majors in March.

Volatility was somewhat subdued in March, absent any notable market driver or specific event. The result was a rather muted movement in the JPY, which was noted in declines in EUR/JPY, GBP/JPY, and USD/JPY trading. The latest results halted TFX’s momentum in 2018, after seeing a strong uptick in FX volumes in January and February.

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Indeed, the first two months of 2018 had set a different tone entirely than that of Q4 2017. During this period, many Japanese exchanges had undergone decreasing volumes. The latest figures in March are on par with other venues, as many exchanges in the institutional space have seen a consolidation over the month.

In terms of TFX, the latest figures saw a decrease in terms of FX volumes during March 2018. In particular, the total trading volume of FX Daily Futures contracts (Click 365) during March 2018 was 2,766,712 contracts. This correlated to a decline of 11.0 percent on a month-over-month basis from 3,107,395 contracts in February 2018. Over a yearly timetable, this figure did manage to see a slight rise, albeit capturing a growth of just 2.6 percent relative to March 2017.

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Additionally, Click 365’s daily average FX contracts also were reported at 125,761 contracts in March 2018, retreating off of 155,370 (2018 high) contracts per day in February 2018. This correlated to 19.1 percent lower month-over-month, with the biggest reason being weak activity in JPY trading pairs.

Looking at specific trading statistics, trading of the USD/JPY fell -6.1 percent in March 2018, with the EUR/JPY falling by 15.7 percent, and the GBP/JPY by 43.4 month-over-month percent respectively. The only pairs to see an increase in JPY trading during March were the TRY/JPY, growing at 49.0 percent and the AUD/JPY, climbing 21.3 percent on a monthly basis.

Equities volumes retreat for consecutive month

In terms of Equity Index Daily Futures contracts on Click Kabu 365, the segment also saw a declining performance in March in tandem with FX. This was on full display following yet another monthly decline of 18.8 percent after posting a reading of 401,655 contracts in March 2018, relative to 494,748 futures contracts in February.

Click Kabu 365’s volumes were also lower across the board as demand for all instruments were lower, resulting in indices in the red. This included monthly declines for Nikkei 225 daily futures (-12.0 percent), DIJA (-35.3 percent), DAX (52.1 percent), and FTSE daily futures (-53.0 percent).

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