Foreign exchange trading broker Oanda Corp. has formally established a new operation in Japan to better support retail and institutional clients in the country and across the Asia Pacific region.
The move follows its acquisition of Japanese broker MyGaika in October last year, which it subsequently renamed Oanda Japan.
In a statement, New York-based Oanda Corp. says it has appointed Tomitaka Ishimura as managing director of the Japanese operation. Ishimura previously worked at trust banks where he was responsible for managing securities and foreign exchange trading services.
Oanda Japan is regulated by the local Financial Services Authority and operates as an independent organisation. Whilst it uses technology from Oanda Corp., it manages risks and sources liquidity independently and its platform pricing varies from that of Oanda Corp. and the other subsidiaries. Leverage on the platform is restricted to a maximum of 25:1, in accordance with Japanese financial regulations.
With the Tokyo-based subsidiary, Oanda is launching in to one of the most actively traded corners of the world’s financial markets. In March this year, research company Aite Group sized the retail FX market in Japan at 3.6 million investors, using figures from the country’s Financial Futures Association and data compiled from almost 40 medium and large retail FX brokers. It estimated that 597,000 traders were active during Q4 2010.
Aite Group says the Japanese brokerage market has been under immense pressure recently due to tighter spreads on USDJPY and this has created a window of opportunity for better-capitalised FX brokers – both Japanese and foreign – to gain market share through acquisition.
“We launched Oanda Japan in response to a clear need in the Japanese forex market – the third most active forex trading market in the world – for low spreads and reliable liquidity sources,” says Michael Stumm, CEO of Oanda Corp.
Oanda Japan is Oanda Corp.’s fifth subsidiary. The other subsidiaries are based in Singapore, Dubai, Canada and the UK.