Japan Sees Lower FX Turnover in April

Following reports from the other regional FX committees, the Tokyo FX Committee has also released its semi-annual turnover survey, indicating that, as was largely the case elsewhere, activity in FX markets was lower than in the April 2022.

Average daily volume in Tokyo was $427.1 billion in April 2023, a drop of 10.7% year-on-year, and down a massive 32.9% from the October survey. Overall activity was at its lowest level since October 2020.

There were dramatic year-on-year declines in both spot and outright forwards, spot activity dropping by 26.1% to $121.4 billion per day – this is the lowest level of activity since the pre-pandemic survey of April 2019 and is the second lowest in Japan since October 2017. Likewise, outright forwards ADV was $49.7 billion, a 24% decline year-on-year and the lowest level since October 2018.

There was slightly more positive news for the Tokyo market in FX swaps and options, with the former rising slightly, by 1.9% from April 2022, to $235.6 billion. FX options activity could not keep track but only fell by 1.6% to $12.6 billion per day. Currency swap turnover was $77 billion, a sharp rise from the $47 billion per day reported in April 2022.

With the reports now all published, activity across the seven centres fell by 5.8% to just over $6.2 trillion per day compared to April 2022. It was up 1.8% from October 2022 and is the second highest aggregated turnover reported to date.

On a global basis, spot activity in the seven centres declined by 6.4% from April 2022, outright forwards increased by 3%, FX swaps is down 7.3% and FX options activity was down 8.9%.