Forex and binary options trading is on the rise in Japan, according to a new report from the FFAJ (Financial Futures Association of Japan).
The trading volume for OTC (over-the-counter) retail forex rose 17.33% in June from the previous month.
The data shows that the 52 members of the organization generated 429 trillion yen in June, up from 366 trillion yen the previous month. The figure was at 416 trillion yen in April at the start of the decline. The new figures point to a potential end to the binary options slump earlier in the year.
The FFAJ says the double-digit spike in trading volume was unexpected, and was likely caused by market volatility related to Brexit. The historic referendum vote also contributed to the yen’s increasing value, which has been on the rise since mid-May.
The Brexit vote’s unexpected result impacted volumes in ways not seen since Swiss National Bank’s 2015 decision.
According to the report, the most traded currency pair was the USD/JPY. Volumes for the pair jumped 1.16% in June. The biggest riser, unsurprisingly, was the GBP/USD, which jumped 146%. The GBP/JPY was next in line, with an increase of 128.8%, followed by the EUR/JPY at 75.8%.
While many big-name brokers like Opteck do not operate in Japan, the country still has a robust binary options market that’s quickly growing. The country’s seven brokers saw trading volumes rise 26.3% in June to more than 41 billion yen. The rise was the first since February, when binary options volumes were at 62 billion yen ahead of a decline.
At the end of June, there were 346,292 binary options accounts in Japan, and 12,676 of those accounts were active. The figures equate to a 1% gain in overall accounts from May and a 6.7% increase in active accounts.
Despite the spike in trading volumes, the FFAJ is still in the red year-over-year, with a 7% decline from 44.13 billion yen in June 2015.
The news is a positive sign for binary options trading in Japan, signaling a possible end to an ongoing decline in trading volumes partly fueled by scam warnings from the FSA (Financial Services Agency) in April.
The FSA released a list of businesses that were not permitted to target Japanese investors, but were doing so nonetheless.
Rigid regulations from the FFAJ have also weighed on volumes. Although it provides end clients with ample protection, rigorous regulations have dampened the popularity of binary options in Japan.
Trading volumes began tumbling in March, falling 22%, and the number of active accounts fell to the lowest level since June 2014.
Data from that month showed a total of 12,786 active accounts and 1,950 new accounts, a stark contrast from June’s figures. At the time, the trend pointed to consolidation in the industry, with the number of active trading accounts sharply lower compared to 2014 when numbers peaked. March’s trading volume figures were the second lowest since December 2015.