Japan has long been undergoing low economic growth. The problem began in the middle of the 1990s, when major Japanese enterprises could not change their former management style following the end of the Communist bloc. To accelerate Japanese economic growth, the government set a financial policy of zero interest. Bank interests have been kept below 1 percent APR as a result. Despite the fact that the policy was lifted in 2006, bank interest rates are still low and it no longer makes sense for the Japanese people to save money in banks.
The savings banks, which have long been the most popular method of saving for Japanese population, became powerless to motivate the public to keep their monetary assets in banks. It might be the first time in the country's history that the people of Japan paid serious attention to investments. People started to take a serious look at the stock market. Internet investment appeared to be an attractive investment option for the public.
The fact was, however, that in addition to low Japanese economic growth, the Japanese stock market had also maintained low growth. In contrast to overseas stock markets, which are showing recovery, the Japanese stock market has remained low. Making matters worse, the salaries of Japanese workers have continued to decrease. Their average salary reached a historic low of four million Japanese yen in 2010. It seems that the Japanese people have lost their means of moneymaking.
The above facts provide a background as to when Japanese investors started to look for new investment opportunities. The Foreign Exchange and Foreign Trade Law was revised in favor of individual traders conducting Foreign Exchange Investment in 1998. High-speed Internet connections worked for this trend about 2002. Stock traders started to use high-speed Internet for their trading. As the stock market continued to stagnate after 2007, the use of high-speed Internet for forex trading was gradually, but steadily, growing.
Many new players participated in the forex trading market. Commodity trading firms initially began dealing in the foreign exchange field.
Since the Japanese forex trade law revision in 1998, it has grown to be one of the top investment choices for many Japanese who lost the advantages of investing. Since so many inexperienced brokers started forex trading, there have been some fiascos created in the marketplace. In addition to establishing its position as one of the top investment choices, it continues to be one of the most vibrant markets in the financial industry in Japan.
Now players set their commissions to zero, advertising in various media, such as TV, radio, or the Internet. Forex trading rapidly drew the attention of individual Japanese investors and grew remarkably. There were unfortunate strategic mistakes made by inexperienced and untrained traders who caused losses for investors after the Lehman crisis. These traders misled investors due to incorrect expectations that the yen would stay low compared to foreign currencies. This resulted in legal regulations put on the leverage in forex trading.
In August 2010, the leverage, which was once allowed to be 400 times as high as the margin deposit, was restricted to a maximum of 50 times the amount of deposit. The leverage maximum was also capped at 25 times the margin deposit amount this year.
Forex trading, centered on online trading, has entered a new phase of practical and steady growth after its slapdash entry stage. Forex trading has now assured its position as one of the major investments for Japanese investors, in addition to savings and stock and trust investments.
With a growing market and maturing mentality, forex traders and investors in Japan are eager to absorb know-how from the outside world. A few gurus have already penetrated this market, making seven-figure revenues in the past few years. Surprisingly, little effort was required to earn such profit. The best way to enter this unknown territory is to team up with strong local players in the educational field who have already helped others.
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