Electronic trading is gaining momentum in Japan, and
more adoption is anticipated, driven by the increasing popularity of
multi-dealer platforms and application programming interfaces (APIs). This is
according to research by the global analytics and insights provider for the
financial services industry, Coalition Greenwich.
The Japanese FX sector
has made a significant shift towards electronic trading, driven by increasingly
sophisticated e-trading systems and the surging liquidity of multi-dealer
platforms. While the global financial markets have long embraced electronic trading,
Japan’s journey has been measured.
Shifting to the Digital
Horizons
Globally, FX trading is
hailed as the most electronic market, with a whopping 76% of cash FX trading
volume reportedly transacted electronically across North America, Europe, and
Asia. While Japan has historically lagged behind in this trend, accounting for
about 60% of FX cash trading volume executed electronically, according to the
report, recent developments suggest a potential change on the horizon.
According to Seiji
Ishii, the Head of Japan at Coalition Greenwich, “The growing popularity
of multi-dealer electronic trading platforms and APIs is providing a foundation
that could, over time, bring the market more in line with global trading
practices that increasingly favor electronic execution.”
A crucial factor
propelling Japan’s embrace of electronic trading lies in the growing popularity
of multi-dealer platforms and application programming interfaces (APIs). These
platforms provide a dynamic foundation that aligns with the global shift
towards electronic execution.
Multi-Dealer Platforms
and APIs: The Driving Forces
Additionally, over the last few years, there has been a
significant increase in Japanese banks embracing multi-dealer platforms, with
their surge climbing from less than half to a remarkable 64%. As these
financial institutions improve liquidity and pricing for major currency pairs
on these platforms, they realize the substantial cost efficiencies that the
electronic FX trading offers, the report noted.
The report is
corroborated by the growing number of industry players expanding their operations to
Japan. In March, Finance
Magnates reported that
the Australian-based broker, ThinkMarkets, had entered
Japan’s forex landscape.
With the official launch of its online trading services in the country, the
company said it was seeking to revolutionize trading experiences through its
proprietary app, ThinkTrader.
Similarly, in June, ACY
Securities ventured
into the world of Japanese and
Hong Kong share CFDs following its introduction of 311 share CFDs across
various global exchanges, including the Frankfurt Stock Exchange (FSE) and the
London Stock Exchange (LSE).
This article was written by Jared Kirui at www.financemagnates.com.
