Japan’s central bank, the Bank of Japan, is the bedrock of the country’s financial system, and its decisions and policy actions can have a major impact on the Japanese economy as well as the global foreign exchange (Forex) markets. This article examines the Bank of Japan’s role in the foreign exchange arena and evaluates its impact on Forex trade and investment activities. , friendly
Writing style: Informal
Level: Beginner
Overview of Bank of Japan Forex News Review
The Bank of Japan Review Series offers readers comprehensive coverage on a range of relevant economic and financial topics. This includes an analysis of retail foreign exchange (FX) margin trading in Japan based on the results of the 2022 BIS Triennial Central Bank Survey. Furthermore, the Review Series provides insights into the Bank of Japan’s monetary policy, and its outlook for economic activity and prices, complete with assessments of risks.
Unprecedented Forex Market Growth in Japan
In recent years, Japan’s foreign exchange (FX) market has grown substantially, with retail investors engaging in FX margin trading at an unprecedented rate. FX margin trading is a form of speculative trading whereby users borrow funds from the broker to purchase currency at an agreed exchange rate, typically with the hope of profiting from future exchange rate movements. In April 2022, the Bank of Japan reported that FX margin trading had exceeded 10 quadrillion yen, a significant achievement.
Programmability and Innovative Measures
In line with the Bank of Japan’s orientation towards new technologies, the Review Series also includes coverage of the programmability aspect of the FX market. Namely, it proposes new and innovative measures that will help digitize the FX market, thereby improving efficiency and encouraging programmability. The Review Series examines the progress made in this direction, and identifies further measures that need to be taken to reach the Bank of Japan’s goals.
Moreover, the Review Series continues to provide important updates on Japan’s FX market, as well as forecasts, analyses and risk assessments relating to the Bank of Japan’s monetary policy. As such, the Review Series is a valuable resource for readers undertaking research into Japan’s FX market, and an important reference tool for those interested in the Bank of Japan’s policy decisions.
Benjamin Gentry 
Simon Cristian