The Japanese Retail Investment Market

May 15, 2008

Abstract

Tokyo, Japan 15 May 2008

Japanese investors still have a strong preference for domestic equities, but there is growing interest for more complex products.

There is an increased number of participants in the foreign exchange margin trading market-particularly women, who currently account for 30% of trading volume on the Tokyo Foreign Exchange. A greater number of brokerages are also offering futures and options that cater to new tastes.

In a new report, , Celent studies the Japanese market by breaking it down into three components: the demographic profile of the retail investor, product preferences and market offerings, and brokerages catering to the retail market. This is done with a particular focus on the active trader market.

Major findings of the report include:

  • Retail investors are increasing in number, with active traders accounting for roughly 6% of the total.
  • The investors are mainly male, but there is a growing number of female active traders engaging in FX margin trading.
  • Domestic equities are the preferred product of both retail and active traders. Margin trading in foreign exchange currency bets is rapidly gaining popularity and there is increased interest in derivative products.

"We can expect to see brokerages increase their marketing of derivatives products to retail traders," says Marie Fukuura, an analyst with Celent's Securities & Investments group and author of the report. "Although these products require a good deal of sophistication to trade, Japanese retail investors, especially the active traders, are keen on learning."

There is a strong preference among retail investors for online trading. This has caused the number of online brokerages to increase sharply in the last few years. Japanese retail investors have a significant preference for the online trading channel, which currently accounts for 90% of retail trading, due to the popularity of the Internet in Japan as well as discounts offered to online traders. There is also a growing number of specialized brokerages in foreign exchange and derivatives.

The 26-page report contains 16 figures and three tables. A table of contents is available online.

Members of Celent's Retail Securities & Investments research service can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.  

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Tokyo, Japan 15 May 2008

 

Executive Summary 3
Introduction 4
Profile of the Japanese Retail Investor 5
Products and Markets 11
Product Preferences  12
Competitive Landscape -- Actors and Strategies 16
Conclusions 23

 

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