Swiss franc fluctuations cost Japan’s futures industry JPY 3.39 billion


The Financial Futures Association of Japan (FFAJ) has joined the lineup of regulators to have quantified the impact “Black Thursday” events have had on the national financial industry. The matter is sensitive for Japan, a historical fortress for Forex trading.

We saw some troublesome developments in the Land of the Rising Sun over the past couple of weeks, as Alpari Japan KK was heavily affected by the insolvency of its parent company in the UK and has started returning funds to clients, while awaiting to be eventually purchased. Another example of the impact of the steep and sudden rise of the Swiss currency was provided by Forex Crown, which used Boston Prime as a liquidity provider for its TightFX service. The closure of Boston Prime after the events on January 15, 2015, has prompted Forex Crown to terminate TightFX.

While many may have expected and even feared that the losses in Japan would be hefty, the picture seems to be not that gloomy, as the data provided by FFAJ show.

table_CHF_Japan

The association estimates that 1,229 futures market participants were negatively affected by the swings in the CHF rates on January 15, 2015. The bulk of those affected are individuals – 1,137, while the number of companies reporting negative impact on their finances is 92.

The total amount of losses suffered is JPY 3.388 billion (USD 28.7m/EUR 25.28m), which is a modest sum, especially when compared to the huge losses recorded by many Western financial firms. If you are a regular reader of LeapRate’s articles, then you have probably spotted our piece of news on the financial impact of the CHF fluctuations on Cyprus Investment Firms (CIFs) – for them it amounted to EUR 42.5 million. In Cyprus, 24 companies reported being affected negatively by the events on January 15, 2015. Even the Cyprus Securities and Exchange Commission (CySEC) admitted the impact was minor.

FFAJ does not give any assessment on whether the sum lost is big or small. One important thing to keep in mind is, of course, that the figures are only preliminary. Another is that the problems of Japanese Forex firms so far appear to stem from problems of their partners, affiliate companies and parent companies.

The list of FFAJ members features 22 entities in the category “other futures brokers”: here we see the Japanese businesses of FXCM, GAIN Capital, OANDA, Alpari, along with YJFX, FX Prime (owned by GMO Corp.), Hirose, etc. The full list of FFAJ members can be found here.

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Swiss franc fluctuations cost Japan's futures industry JPY 3.39 billion

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