From Traditional to Digital: Japanese FX Market Embraces Electronic Evolution

<p>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.</p><p>The Japanese FX sector
has made a significant shift towards electronic trading, driven by increasingly
sophisticated e-trading systems and the surging <a href="https://www.financemagnates.com/terms/l/liquidity/">liquidity</a> of multi-dealer
platforms. While the global financial markets have long embraced electronic trading,
Japan's journey has been measured.</p><p>Shifting to the Digital
Horizons</p><p>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.</p><p>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."</p><p>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.</p><p>Multi-Dealer Platforms
and APIs: The Driving Forces</p><p>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.</p><p>The report is
corroborated by the growing number of industry players expanding their operations to
Japan. In March, <a href="https://www.financemagnates.com/forex/brokers/thinkmarkets-launches-fx-trading-services-in-japan/" target="_blank">Finance
Magnates</a> reported that
the Australian-based broker, ThinkMarkets, had <a href="https://www.financemagnates.com/forex/brokers/thinkmarkets-launches-fx-trading-services-in-japan/" target="_blank">entered
Japan's forex landscape</a>.
With the official launch of its <a href="https://www.financemagnates.com/terms/o/online-trading/">online trading</a> services in the country, the
company said it was seeking to revolutionize trading experiences through its
proprietary app, ThinkTrader.</p><p>Similarly, in June, ACY
Securities <a href="https://www.financemagnates.com/thought-leadership/acy-securities-adds-japanese-and-hong-kong-share-cfds-to-its-offering-on-metatrader-5/" target="_blank">ventured
into the world of Japanese</a> 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).</p>

This article was written by Jared Kirui at www.financemagnates.com.