Japan's Margin Traders: Why They Matter for Currency Markets
- Mrs. Watanabes account for 46% of Tokyo spot FX transactions
- Years of BOJ monetary easing have fueled a hunger for yield
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The yen’s surge versus all its 146 peers in early January put the spotlight on Japan’s margin traders, who have been growing in influence as the nation’s ultra-low bond yields spur them to bet on overseas currencies.
Foreign-exchange margin trading gained popularity in Japan after a revision to financial legislation in 2005, and surged to account for 68 percent of total spot transactions in 2013 when the central bank expanded quantitative easing.