Annual Results Reveal a Tough Year for Japanese FX Brokers

If you were wondering how bad was last year for Japanese brokers as the volatility in the FX markets collapsed, the annual report of Compagnie Financiere Tradition (CFT) sheds some light on the issue. The company has reported that its retail forex subsidiary had a difficult year in 2017.

The report shows revenues in the first quarter of the year declining by 23.1 percent in constant currencies to $29 million (CHF 27.5 million). Underlying operating profits collapsed to $7.8 million (CHF 7.4 million), a figure that is about 40 percent lower year-on-year.

The underlying operating margin of the Japanese retail FX subsidiary of CFT dropped to 27% from 34.3%.

Volatility Collapse Cuts into Revenues

During 2017, the main issue for the industry was a broadly observed collapse in volatility. According to data from Japanese brokers, however, the decline in trading activity related to the Japanese yen (Mrs. Watanabe’s favorite asset to trade), was even broader.

Trading volumes in the first two months of the year have completely reversed. The activity across JPY crosses is back in play and retail forex traders are back to trading full swing.



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