“Gaitame White Paper” by Gaitame.com Research Institute Ltd.

Gaitame.com Research Institute Ltd., that is a research organization of the large Over-The-Counter (OTC) Forex (FX) trader, Gaitame.com Co., Ltd., announced the result of trading research based on inquiries to FX investment customers. Its content is various data such as the number of traders and accounts, and the margin money amounts of customers in the FX industry in Japan every month, and is written in“Gaitame White Paper”(price: 2,200 yen including tax) published by the company every year. On the book, Mr. Heizo Takenaka (special research chief of the report, former minister for Internal Affairs and Communications, and honorary professor of Keio University) comments“It is a comprehensive analysis report”.
This time, the issue 13 of the report was published. The following is the present situation of the domestic FX markets based on the issue.

FX trading in Japan has begun since“Foreign exchange and foreign trade law”was amended in 1998 and forex business was liberalized at the same time. It has passed for twenty five years, but until the middle of 2000－2010, because uniformity regarding its trading rule and structure was missing, troubles between FX traders and their customers were endless.

However, because the new law, revision of financial futures trading act was enforced in 2005 and registration system of FX traders was started, they came to be selected after that. In 2007, financial instruments and exchange act that aims for thoroughness of investor protection was enforced and financial futures trading law was merged into the act. In 2010, segregated management of customer assets became mandatory, and in 2011, leverage regulation was reduced to twenty five times at a maximum, etc. So rulemaking to prepare market environment such as investor protection mainly is moving forward.

11 Million 630 Thousand Accounts at OTC and Exchange FX Traders－Highest Record Four Years in A Row

The number of open accounts at OTC FX traders as of the end of December 2022 was 10,539,549 (7.2 percent up year on year), still increasing. Among them, during the third quarter (October－December, 2022), 3Q, the number of accounts that had traded was 841,475 (3.7 percent up), increasing too. Active account ratio to total account was about 8.0 percent, decreasing from 8.3 percent year on year.

Meanwhile, the number of total accounts of the exchange FX“Click 365”listed on Tokyo Financial Exchange was 1,092,172 (4.5 percent up), increasing as the same as OTC FX account, but the number of active accounts during 3Q was 18,508 (5.3 percent down) and active account ratio to total account was 1.7 percent, decreasing from 1.9 percent year on year.

As the result, the number of total account at OTC and Exchange FX markets was 11,631,721 (6.9 percent up) as of the end of December 2022, becoming record high four years in a row, and the number of active account was 859,983 (3.5 percent up).

Active account ratio to total account at the both markets was 7.4 percent, decreasing by 0.2 percent from 7.6 percent year on year.

The total open accounts exceeded 10 million for the first time in December 2022 , then increasing and becoming highest record at the end of December 2022. The number of active accounts at the both markets was 897,813 during January－March, 2020，when the yen market fluctuated owing to the coronavirus pandemic, becoming highest record. In 2022, USD/JPY was from 113 to 151 yen, so dollar appreciation and yen depreciation were progressing, and then, toward the end of the year, a big movement flipping to 130 yen appeared, but the number of total account during each quarter in 2022 was lower than it during January－March, 2020.

As to FX traders, according to reports, the number of OTC FX traders that had traded during 3Q was 49, almost the same as year on year. The number was around 50 during last six years, so there was rare new comer and retreater but became lower than half of 118, the highest during FY 2008. The number of exchange FX traders that had traded during 3Q was 19, decreasing by 2 from 21 year on year.

2 trillion 280 billion 500 million yen of margin money, over 10 quadrillion yen of trading value for the first time, doubling year on year

As to margin money received by FX traders as of the end of December 2022, margin to OTC FX traders was 1,817,300,000,000 yen (10.0 percent up year on year), increasing by 164,900,000,000 yen and margin to exchange FX traders of Click 365 was 463,100,000,000 yen (16.9 percent up year on year), increasing by 66,800,000,000 yen. As the result, total of the both markets was 2,280,500,000,000 yen (11.3 percent up year on year). As to margin at the end of fiscal year, March, it was record high seven years in a row since FY 2010, and then, it decreased once and regained drastically. During July－September, 2022, 2Q, it reached 2,355,900,000,000 yen, becoming record high for quarter base, but decreased by about 75,000,000,000 yen during the next quarter, 3Q.

Total trading value at OTC FX traders in 2022 was 12,172,765,100,000,000 yen (100.6 percent up year on year), doubling than the previous year and exceeding 10 quadrillion yen for the first time. As to total trading value at exchange FX traders, it was 42,271,400,000,000 yen (69.7 percent up year on year) , increasing by 17,355,400,000,000 yen. As the result, total trading value at the both markets was 12,205,253,700,000,000 yen (103.3 percent up year on year), increasing drastically.

As to trading value by currency pair at OTC FX traders, USD/JPY was 9,160,302,600,000,000 yen, highest by currency pair, occupying 75.2 percent, about three fourths of all currency pairs. So far, highest trading value of USD/JPY was 4,036,201,500,000,000 yen in 2021, and in 2022, it was more than double, becoming 9,000 trillion yen level.

Second highest trading value was GBP/JPY seven years in a row. Its trading value in 2022 was 881,586,200,000,000 yen (31.7 percent up year on year), increasing by about 212,000,000,000,000 yen year on year, but its share was 7.2 percent, decreasing by 3.8 point. The following: 640,363,600,000,000 yen (55.3 percent up, share: 5.2 percent) of AUD/JPY, 556,745,800,000,000 yen (124.7 percent up, 3.7 percent) of EUR/JPY and 453,536,300,000,000 yen (57.4 percent up, 3.7 percent).

During 2022, since FX trading was focused on USD/JPY, although trading value of the other currency pairs increased greatly each, its trading share decreased each. On that background, Gaitame.com Research Institute Ltd. analyses that as dollar appreciation and yen depreciation were progressing in combining the both financial policies: the aggressive hike of interest rate by FRB in U.S.A and the sustenance of monetary easing by Bank of Japan, individual investors were easy to deal with USD/JPY trading.

（Futures Tribune・issued April 28, 2023・no.3212）