Preface

CONTENT

• Part I Global Forex Margin Trading Market and User Research Report Development Status of the Forex Margin Trading Market in Japan

  1.1 Overview of Japanese Financial Market

  1.2 Development History of the Forex Margin Trading Industry in Japan

  1.2.4 Development Status of the Forex Margin Trading Industry in Japan: Transaction Scale

  1.3 Development Environment of the Forex Margin Trading Industry in Japan

• Part II Global Forex Margin Trading Market and User Research Report Development Status of the Forex Margin Trading Industry in Japan

  2.1.1 Features of the Products in the Market Under FSA Regulation

  2.1.2 Trading Tools in the Market Under FSA Regulation

  2.1.12 Mutual Attitudes Between Japanese Brokers and International Brokers in Japan

  2.2 Operation and Development Status of the Offshore Forex Brokers in Japan

  2.2.1 Offshore Brokers in Japan: Product Features and Competitive Advantages

  2.3 Development of Cryptocurrency in Japan

• Part III Global Forex Margin Trading Market and User Research Report Research on Japanese Forex Margin Investors

  3.2 Investment Habit of Forex Investors in Japan

• Part IV Global Forex Margin Trading Market and User Research Report Trends in Japanese Forex Margin Industry

  4.1 Business Mode of Japanese Forex Brokers in Mature Environment

  4.5 Business Opportunities for Overseas Brokers in Japan

Part I Global Forex Margin Trading Market and User Research Report Development Status of the Forex Margin Trading Market in Japan

• 1.1 Overview of Japanese Financial Market

  Japan, called the country of sunrise, is located on the west coast of the Pacific Ocean. It is a highly developed capitalist country, the third largest economy in the world, and the member of G7, G20, etc. Lacking of natural resources, Japan greatly depends on imports. Developed manufacturing industry is the backbone of the national economy, and the industries of scientific research, aerospace, manufacturing, and education top the global rankings. Besides, the cultural industry led by the animation and game industries and the developed tourism industry are also important symbols. Japanese citizens generally have good education, living standards and national quality, and their national income levels are among the highest in the world.

• 1.2 Development History of the Forex Margin Trading Industry in Japan

  Japan's forex margin trading industry started in 1998 with a history of more than 20 years. Compared to the other Asian countries, Japanese forex margin trading industry today has been mature in all aspects, including government regulation, brokerage operations, and investor education. But looking back to the development course of the past two decades, there were still several critical moments, which were the important factors that promoted the prosperity and stability of this industry in Japan today

• 1.2.4 Development Status of the Forex Margin Trading Industry in Japan: Transaction Scale

  According to FFAJ (The Financial Futures Association of Japan) data, OTC retail forex transactions in Japan in 2018 reached 36.6 trillion US dollars, accounting for about 39.5% of the global market in 2018—especially considering that Japan only offers leverage up to 1:25, so the amount of funds that Japanese investors have actually invested in the market is staggering. However, compared with the domestic historical situation, the forex margin transaction scale of Japan has declined year after year. In 2018, it decreased by approximately 2.82 trillion US dollars compared with 2017, which fell by 7.1%. The size of OTC retail transactions in Japan has continued to decline since 2019. According to the WikiResearch market forecast, the size of Japanese forex margin trading is expected to be 3.266 billion US dollars by 2020.

• 1.3 Development Environment of the Forex Margin Trading Industry in Japan

  Japan is the third largest economy in the world. According to the Global Competitiveness Report 2019 from World Economic Organization, Japan ranks the 6th among all countries in the world and has shown strong performance in the areas of infrastructure, economic stability, health, technology and finance, which supports the development and stability of the overall financial and forex margin trading industry

Part II Global Forex Margin Trading Market and User Research Report Development Status of the Forex Margin Trading Industry in Japan

• 2.1.1 Features of the Products in the Market Under FSA Regulation

  The FSA has set strict rules on the domestic forex margin trading. Products, which are offered by different types of brokers, are quite similar, especially in spread, leverage, currency pairs and deposit.

• 2.1.2 Trading Tools in the Market Under FSA Regulation

  One important difference between Japan and the rest of the world is that most of the local brokers develop their own trading software for Japanese clients, which was again confirmed by the survey results. But 42% of the interviewed brokers offer MT4 at the same time for investors to choose. International brokers in Japan are closely regulated by the FSA, so their forex products are similar to the local brokers’. But the international brokers interviewed all offer MT4/MT5, which are synchronized with global markets, without offering self-developed software.

• 2.1.12 Mutual Attitudes Between Japanese Brokers and International Brokers in Japan

  According to WikiResearch’s survey of Japan, all the local brokers interviewed were, without exception, bearish on the prospects of overseas brokers in the country and believed that the impact on themselves was extremely limited after international brokers entered the Japanese market. Even highly successful brokers in overseas markets, such as the US and the UK, tend to have a rough path forward after entering the Japanese market. Similarly, all international brokers interviewed found it difficult to compete directly with local brokers in the Japanese market. Even a few international brokers, regarded by their competitors as successful, still believe that compared with other overseas markets, running a business in Japan is particularly difficult with obvious bottlenecks.

• 2.2 Operation and Development Status of the Offshore Forex Brokers in Japan

  When doing the survey, we luckily had a chance to catch a glimpse of the Japanese offshore forex margin trading market. This group of brokers (hereinafter referred to as “offshore brokers”) provide offshore accounts and trading software for Japanese investors. They are not subject to FSA regulation, and cannot be publicly promoted in the Japanese media. This type of brokers have two roots: one is those brokers that once served as IBs for Japanese forex brokers, but gradually turned “underground” with increasingly strict regulations, and became brokers offering offshore services. The other is companies that introduced overseas product models to Japan after making forex investments abroad. Due to the low profile of players in this offshore market, WikiResearch only interviewed four domestic offshore forex service providers during this field trip. However, even from the limited information, we can still see the prosperity of the offshore market compared with the FSA-regulated market.

• 2.2.1 Offshore Brokers in Japan: Product Features and Competitive Advantages

  Products provided by Japanese offshore brokers, who are not subjected to FSA, are more closer to other countries', with slightly higher spreads, higher available leverage, more currency pairs and MT4. Hence these offshore brokers are quite different from those domestic ones.

• 2.3 Development of Cryptocurrency in Japan

  Cryptocurrencies have experienced extremely rapid development in Japan. In early days, cryptocurrencies were widely regarded as a speculative product in Japan. After Japan first introduced the new policies, it became the first country in the world to provide legal exchange protection and management systems for trading cyptocurrency. Since 2017, crytocurrencies have become one of the most popular financial instruments in Japan. Japanese yen accounts for up to 40% of Bitcoin transactions worldwide up to now. During this process, FSA has continued to play an important role with its proactive supervision .

Part III Global Forex Margin Trading Market and User Research Report Research on Japanese Forex Margin Investors

• 3.2 Investment Habit of Forex Investors in Japan

  According to WikiResearch, more than 40% of the forex investors in Japan use 25-time leverage which is the legal limit stipulated by FSA. In trading frequency respect, 89.7% of the forex investors in Japan conduct trading more than once weekly, which is relatively high.

Part IV Global Forex Margin Trading Market and User Research Report Trends in Japanese Forex Margin Industry

• 4.1 Business Mode of Japanese Forex Brokers in Mature Environment

  Over the past 2 decades of development, the scale of forex margin industry has shown a slight decline. As economic depression and stock market collapse occurred in 1990s, brokers began to take shape in investment philosophy and products according to their own distinctions.

• 4.5 Business Opportunities for Overseas Brokers in Japan

  The huge scale market in Japan is coveted by global brokers. Despite of the difficulties, it is still likely for overseas brokers to conduct business in Japan. There are three points worth paying attention to: