A new report by the Financial Future Association of Japan (FFAJ) is painting a bleak picture of the forex and binary options market. The report suggests that trading volumes fell by over 18% during the month.
Tough time for trading platforms
April proved to be a tough month for trading platforms in the foreign exchange industry. The sector experienced low liquidity, keeping trading volumes with brokers low. The FFAJ is suggesting that the retail foreign exchange margin trading operators and the retail over the counter (OTC) binary options dealers both faced several challenges during the month.
The number of OTC forex margin trading operators registered with the FFAJ is 54, as of April 2019. The number did not reduce or increase during the month, because of which they do not have a significant impact on the market. In April, these operators posted OTC trading volume of the Tokyo Financial Exchange (TFX) of ¥235.5 trillion ($2.14 trillion). The numbers are down by 18.21% percent when compared with March 2019.
Problems abound for the industry
The trading volume for USD/JPY or Cross Yen was also disappointing on the Tokyo Financial Exchange. Trading volumes fell by 18.43$ percent in April, compared to March, to reach ¥203.4 trillion. On-exchange contracts fared even worse last month. Their trading volume was ¥1.5 trillion, which marked a whopping 26.64% decline over March.
Binary options also showed dismal figures last month. The FFAJ combined the trading volume of its eight members, including GMO Click Securities to calculate the overall health of the market. However, the trading volume of the month still appeared weak. Binary options volume for April was ¥26.2 billion, marking a 17.63% decline over March’s ¥31.8 billion figure.
Previously, the FFAJ had shown promising figures for the month of March. Volumes appeared to be taking flight in both the forex and binary options sectors after a disappointing turn in February. Though the numbers in some areas did not match expectations set in January, the market appeared to be moving in the right direction. The on-exchange trading volume, binary options volume, as well as forex volume, flourished during the month.
With weak numbers in April, it appears that the market is retracting from its previous growth. The markets are following are boom-retraction pattern month-over-mont, which shows the lack of stability in the Japanese forex markets. Last month, we also learned that some local trading platforms are also expanding abroad in search of greener pastures.