It is widely acknowledged across the entire FX industry that Japan’s largely domestic market retail FX businesses contribute approximately 30% to 40% of all global retail FX order flow, and that Japanese FX companies dominate in terms of monthly trading volume.
Today, the Financial Futures Association of Japan (FFAJ) has published its quarterly report for the period between October 1, 2014 and December 31, 2014, which clearly demonstrates that Japan’s FX business is booming.
OTC margin FX trading volume increased by a remarkable 132.1% during the final quarter of 2014, with combined volumes in Japan reaching a remarkable 1.76 quadrillion yen.
Indeed, during the recent months, the upward direction in volumes has continued into the initial part of 2015, with GMO Click Securities having recorded $1.2 trillion trading volume  in January, setting an all time record for monthly trading volume for a retail FX brokerage.
On exchange FX trading in Japan almost doubled to 13,802,681 contracts in the fourth quarter of 2014 compared to 8,866,665 in the third quarter, however, true to form in Japan’s domestic market orientated FX industry, overseas activity in exchange traded FX remained steady at 9,059,887 contracts in the last quarter of the year compared to 9,085,599 in the third quarter.
During the final quarter of 2014, the FFAJ attributes the vast increase in trading volume compared to the previous to the upturn in trading activity in FX margin trading in the domestic exchanges and over-the-counter in the final months of 2014 following a stagnant period. Â While the trading volume of interest rate related futures transactions both in the domestic and overseas exchanges was sluggish in general, on the other hand, the currency related transactions in the overseas exchange, in particular, the trading volume of self-dealing transactions (Propriety Account) of Association members grew by 24.3% compared to the previous term.
An interesting dynamic within the Japanese FX market is the propensity toward proprietary trading, an area in which FX futures increased to 600 contracts in the fourth quarter, a 17.8% improvement over the third quarter of the year, whilst overseas futures trading on proprietary accounts increased by 46.3% to 5,181 contracts.
To view the official announcement from FFAJ, click here.