New Style for Kimono Traders
Mrs Watanabe is set to have her wings clipped. The archetypal frugal Japanese woman, traditionally the keeper of the household budget, has been a ferocious punter on the foreign exchange markets in recent years. Indeed, she was a pioneer of the “yen carry” — borrowing in low-yielding currencies, like Japan’s, to invest in higher-yielders, such as the Aussie or Kiwi dollar.
Consequently, the Japanese retail foreign exchange market has become bigger than the rest of the world’s combined, while retail investors …
Mrs Watanabe is set to have her wings clipped. The archetypal frugal Japanese woman, traditionally the keeper of the household budget, has been a ferocious punter on the foreign exchange markets in recent years. Indeed, she was a pioneer of the “yen carry” — borrowing in low-yielding currencies, like Japan’s, to invest in higher-yielders, such as the Aussie or Kiwi dollar.
Consequently, the Japanese retail foreign exchange market has become bigger than the rest of the world’s combined, while retail investors account for a third of the Tokyo forex market.
But perhaps no longer. Japanese regulators are looking to introduce rules limiting the amount of leverage that retail forex speculators may use.
This, incredibly, can often be up to 400 times. In other words, where a punter deposits $1,000, they can take trading positions of up to $400,000. Where punters were prepared to use a “stop loss” on their bet, some firms offered leverage of up to 700 times.
