Japan trading soars

Tokyo Financial Exchange FX Trading Volumes up by a Third

Trading activity in Japan picked up materially when considering seasonality and that June is a typically slower month seasonally

The typical summer slowdown in trading volumes across the foreign exchange market is not present in Japan this year. The Tokyo Financial Exchange has just announced that the amount of margin FX product Click 365 contracts traded through the exchange in June averaged 173,741 daily, totaling 3,822,266 for the month.

Comparing these figures to the previous month, we are seeing a bit over 38 percent growth. Last year’s summer lull is nowhere to be found as year-on-year growth figures have spiked 135.9 percent.

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The main growth component in June was the USD/JPY pair, where month-on-month trading volumes spiked by almost two thirds when compared to May, marking 278 percent higher than a year ago.

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Other growth components were the EUR/JPY and the NZD/JPY figures where activity was substantial. While the euro turmoil surrounding the prospects of a Grexit from the Eurozone has driven volumes in the former, the latter was boosted by the prospects for low inflation and a series of rate cuts by the Reserve Bank of New Zealand.

EUR/USD trading remained strong for the local market, flat month-on-month but almost 5 times more traded than it was in June 2014.

Activity on the local foreign exchange market has been driven mainly by domestic political developments. With some remarks by leading central bankers and politicians that the Japanese yen has weakened “enough”, the expectations for further easing by the Bank of Japan have been somewhat reduced.

Looking ahead, Japanese yen volatility has probably resulted in higher trading turnover for the retail trading brokers in the country too. We are expecting GMO Click, DMM Markets and Invast Securities to report their numbers in the coming couple of days.

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