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Recent Trends in Japanese Foreign-Exchange Margin Trading

September 2008
Financial Markets Department
Tai Terada, Naoto Higashio, Jun Iwasaki

Click on rev08e03.pdf to download the full text.

Foreign-exchange margin trading by individual investors has become common in Japan during the last several years. This paper uses available data to review recent trends in Japanese foreign-exchange margin trading. It finds that turmoil in international financial markets, triggered by the "subprime debacle" since August 2007, resulted in a decline in outstanding positions for foreign-exchange margin trading. There was nonetheless a steady increase in account numbers and trading volumes. Since August 2007, trading approaches and currency selection have also changed. For example, leverage has declined, dollar/yen turnover ratios have increased, and there have been shifts to high-yield currencies.


Bank of Japan Review is published by the Bank of Japan to explain recent economic and financial topics for a wide range of readers. This report, 2008-E-3, is a translation of the original Japanese issue, 2008-J-7, published in August 2008. The views expressed in the Review are those of the authors and do not necessarily represent those of the Bank of Japan.

If you have comments or questions, please contact Takeshi Kimura, Director, Financial Markets Department (