Japan is a seat of technological breakthrough and innovation. It is an efficient country where things move fast. In Japan binary options has always been very popular and also very highly regulated. The Japanese financial authority that regulates binary options releases a monthly report of how the market is faring. At the time of writing this article in 2017 there are only 8 regulated binary brokers in Japan. There are 11,472 active traders of binaries in the country and over 365,000 that have accounts but do not trade. The regulator also lists the amount of trading volume and profit and loss. What an efficient regulator it is!
Trading of binary options in Japan was extremely popular in 2013 but the rate of growth slows each year. Perhaps this follows the colourful economic history including all the heavy quantitive easing in Japan of late.
In Japan only three types of trading are allowed to be offered to investors, these include the classic binary options, range or boundary trading and one touch. Last month in Japan 77% of customers lost their money while trading binary options. Here’s a link to check out the latest statistics in binary trading for yourself.
Best Binary Options Broker in Japan
Well it’s a very short list actually. Only 9 brokers are regulated in Japan. There are unregulated brokers to be we say stick to the regulated ones so you have a recourse should the broker turn out to be a spam.
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Trading Binary options in Japan is legal and it is also very heavily regulated by the Financial Futures Association of Japan (FFAJ). As well as being a stringent regulatory authority on this over the counter trading type, the FFAJ releases data on the local state of the binary options market. This is an unusual activity for a regulatory authority to undertake. It doesn’t happen anywhere else in the world. It is a true sign of the efficiency in that country. As with other global financial regulators the FFAJ releases information on the scam brokers, the regulated ones (although there’s not that man it allows) and the unregulated local brokers too.
On a monthly basis the FFAJ publishes data that shows just how popular binary options trading is in Japan. It also reports on the most popularly traded assets, which in the case of the Japanese binary options market happens to be the currencies and more specifically the USD/JPY. Closely following in popularity are the GBP/JPY, the EUR/JPY and the AUD/JPY. So popular is the demand for trading of these pairs that the authority have a whole area of the website entirely dedicated to this information.
In the case of most of the world, binary options traders have a huge selection of trading types that they can access. Some traders prefer short-term options while others prefer the ability to implement trading strategies on long term options. Japan however is different. The FFAJ have banned all options with a timeframe of less than 120 minutes, meaning short term or speedy options are not available here. These options types are very popular, however if you speak to professional or institutional traders, they will tell you that you cannot possibly trade well on short term options of 5 minutes or 60 seconds, so it seems a very fair and good call on the part of the Japanese regulatory body.
According to past reports regarding Japanese traders, on the whole they prefer range trading options as well as one touch options, and they don’t seem to be unhappy with the slim choice of trade types available to them. For those that want a wider choice of options to trade, they often trade with unregulated brokers. The FFAJ doesn’t recommend this though as there is no recourse if the trader is mistreated.
Here’s a list of the FFAJ stipulations for the trading of binary options in Japan:
1. Minimum Trading Period
As mentioned earlier trades must be no shorter than two hours,
FFAJ like most reuglators requires a level of transparency when it comes to the brokers’ pricing, this also means that traders should be allowed to continue trading on their option right up to expiry time.
3. Promotions and Bonuses
Just like CySEC in Cyprus, the FFAJ are cracking down on bonuses and promotions, which as many of us know are basically cons. This also means that affiliate websites like portals may also not promise gifts or promotions to attract new clients.
4. Client Suitability
Every broker must ascertain client suitability to trade before they accept a new client. This is done by the client filling out a questionnaire. The broker must also set out clearly in writing the potential risks and rewards of each option.
The trader must be clear about the potential payouts over a series of trades to build a clear idea about his potential win.
Deposit Methods Available In Japan
Japan is considered the main financial centre of Asia. It is a very important country in financial terms. Along with London and New York Japan is considered as a major financial city and as you would expect all major deposit methods are accepted from bank wires, to credit cards to a whole host of electronic wallets.
- Is it legal to trade binaries in Japan?
Yes binary options trading is legal in Japan however brokers must comply with strict oversight and regulation
- Are binaries regulated in Japan?
Yes all brokers that wish to serve the Japanese market must be licensed by the FFAJ. The regulator is able to ban and fine brokerage firms that do not follow their levels of conduct.
- How to trade binaries in Japan?
Bear in mind that when trading in Japan you will not see adverts advertising promotions or cashback offers by the brokers. Also you will only trade with the classic binary options platform, the range trading platform and the one touch platform. Also there is no short term trading. The shortest expiry time is 2 hours. When you sign up with a broker you will be required to fill out a suitability report (like with CySEC) which will ascertain your level of binary trading before you can actually trade. The system is highly protective of traders. If only all regulators worked in this way!
In our experience the Japanese regulator is the most efficient and tightest on its regulations than any other in existence. On the other hand the binary options industry in Japan, once so popular is dropping off each year quite dramatically. One thing’s for sure Japan falls firmly on the side of the trader rather than on the side of the broker.