Astute Japanese traders looking to capitalize on FX volatility – again!

Once again, Japan’s traders are requesting trading facilities for volatile currencies. First of all the CHF boomed in the aftermath of Black Thursday in January 2015, now the Turkish Lira is in high demand among those in the Land of the Rising Sun.

japan

History is repeating itself, as Japan’s astute FX traders are once again looking to trade volatility in other markets which has been caused by geopolitical events away from home.

During the Swiss National Bank’s removal of the 1.20 peg on the EURCHF in January, traders in Japan continued to look toward making the most of volatile situations whilst traders in other regions scaled back their positions and brokerages in situations which create high levels of volatility often look at risk management measures by increasing margin requirements, decreasing leverage and in some cases, setting orders featuring the currency in question to close only.

A case in point which attracted attention of those paying close attention was the massive increase in trading the CHF in Japan in January 2015, in the aftermath of the Swiss National Bank’s black swan event.

A stratospheric 635% increase in volumes on the CHF/JPY took place in January 2015 on Click 365 exchange-traded FX contracts over the previous January, a clear testimony that the sharp increase in the value of the Swiss franc against a multitude of other currencies attracted the attention of Japan’s traders, and indeed contrary to being exposed to negative client balances due to open CHF trades as was the case with a great many FX brokerages and venues across the world, Japanese industry participants traded the Swiss currency against the domestic tender at a very high rate.

This trading pattern is once again emerging, with Turkish Lira now becoming a currency in demand among Japanese traders.

Whilst many firms in Europe and North America have taken restrictive measures to decrease exposure to potential negative client balances as a result of extreme volatility brought about by the rapid decrease in the value of the Turkish Lira against all major currencies (particularly the benchmark US dollar) over the past few days following the attempted military coup in Turkey, some restricting trading of the currency, and others reducing leverage or increasing margin requirements, Japan’s traders have developed an appetite for the currency.

This morning, Switzerland’s Dukascopy Bank has added the Turkish Lira and Japanese Yen (TRY/JPY) pair in a demo account environment, as well as the South African Rand against the Japanese Yen (ZAR/JPY).

Dukascopy Bank has stated that the reason for this is as a result of numerous requests from Japanese traders, and that the instruments will soon be available on live accounts.

Japan has been an important strategic market for Dukascopy Bank over the past year, as the company acquired Alpari Japan just six months after the insolvency of Alpari UK when it fell foul of negative client balances generated by exposure to Swiss Franc volatility on January 15 2015.

At the time, Dukascopy Bank’s will to expand into Japan was part of a very rare acquisitions path for the company, its previous reach into overseas regions having been conducted via white label partnerships across the world, led for 8 years by at-the-time First Vice President Luis Sanchez before he left the firm to become CEO of BMFN in November 2014.

As calculated and conservative as Japan’s traders are loyal to their home territory, it is very clear that they know how to capitalize on market opportunities and are not afraid of volatility.

Read this next

Retail FX

Stephen Kalayjian launches educational and community platform TradeEZ

TradeEZ has partnered with online broker TradeZero to provide chart overlays that can be accessed on the TradeZero platform. In the future, the firm will be looking to partner with some of the largest firms around the world.

Retail FX

LiteFinance launches new mobile app on Google Play

The mobile app allows users to trade and copy professional traders’ positions and gain access to trading chat rooms.

Technology

ECXX taps OneTick for data management and analytics

OneTick is asset class-agnostic and currently has customers across FX, equities, futures, CFDs, FI, and options.

Industry News

$1.5 million: SEC fines BNY Mellon Investment Advisor for misstatements and omissions about ESG

Investors are increasingly focused on ESG considerations when making investment decisions.

Digital Assets

Mercuryo reaches 3 million users amid crypto payments’ US and Asia expansion

“The opportunities for linking crypto and fiat currencies are abundant. From crypto projects that require fiat solutions (like fiat on and off ramps and IBANs), through to crypto for traditional fiat systems, and solutions for fintech companies that enable clients to buy or sell crypto within their own infrastructure.”

Retail FX

Maltese watchdog warns of bogus broker Perfect Choice Trade

The Malta Financial Services Authority (MFSA), the regulator responsible for the oversight of the forex  sector in the Mediterranean island, today issued a warning against a forex broker that offers its services without having the authorization to do so.

Digital Assets

Dukascopy warns of fake website impersonating its cryptocurrency

Switzerland’s forex bank and broker, Dukascopy, today warned against a fraudulent website that have been falsely claiming affiliation with its ‎authorized brand.‎

Uncategorized

Freetrade raises £30 million to fund business expansion

Freetrade, which calls itself a challenger stockbroker, has raised £30 million in debt financing led by a clutch of existing investors.

Digital Assets

Crypto assets under management at lowest point since July 2021

Crypto investment products registered outflows for a second consecutive week, the bulk of which came from bitcoin funds, according to data from digital asset manager CoinShares.

<