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Retail FX in Japan, 2019

Annual report series covering development of retail FX trading in Japan

THE RETAIL TRADING EXPERIENCE IN JAPAN, 2019

Introduction

Two decades since the launch of retail FX trading globally, Japan remains a very relevant case study for regulators and brokers around the world to understanding foreign exchange (FX) trading at the retail level, or for that matter retail trading of any asset class. The vibrancy of Japan’s brokerage scene takes place within a credible regulatory environment and begs the question of how industry and regulators were able to strike a balance that achieves sensible industry growth. Japan’s retail FX trading has reached highs of US$250 billion per day, and it has been adopted by roughly 7% of the country’s adult population and 15.5% of the population holding investable assets. 


Select questions answered in this study include: 


  • What features in Japan’s OTC microstructure and regulatory framework have allowed more than a dozen brokerage firms to remain viable for more than a decade? 
  • What are the preferences of Japanese investors regarding financial products, retail FX brokers, and currency pairs?
  • How competitive is Japan’s retail FX brokerage market evidenced by prevailing spreads and market share analysis? 


TOPICS ADDRESSED

  • Japan’s trading population
  • Financial product preferences
  • Japan’s regulatory footprint
  • Retail FX/CFD trading volume globally, by major region and product
  • Japan’s retail FX volume 
  • FX pair preferences and behavior around major net long/short positions
  • Breadth of FX pair offerings
  • Lessons from the post-leverage reduction period
  • Japanese active account growth stats, 2009-2018
  • Japan’s client deposit changes, 2009-2018
  • Japan’s diverse brokerage firm landscape – ownership types
  • Agency v. principal brokers v. both
  • Own v. third-party trade execution system v. both
  • Share of internalization v. hedging via banks, other domestic firms, or offshore firms
  • Evolution of FX prime brokerage in Japan’s retail FX market, 2014 to 2018
  • Select electronic FX trading platform preferences used by FX brokers
  • Spread competition by broker and currency pair
  • Volume weighted spread costs to consumers by broker Average daily volume market share of Japanese FX brokers – 17 firms
  • Ranking of Japanese FX brokers within the top-30 global brokerage firms, 2018
  • Ranking of Japanese FX brokers by client deposits – 17 firms
  • Ranking of Japanese FX brokers by client accounts – 17 firms


REPORT ACCESS AND QUESTIONS

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