On Click 365 in October, USD/JPY is expected to struggle to rise, while EUR/JPY may continue to probe lower levels. This report reviews September trading volume and margin trends, trading conditions in major currencies, and the outlook surrounding policy decisions by the US Federal Reserve and the BOJ at the end of the month.
Click 365, operated by the Tokyo Financial Exchange, recorded a 28.2% month-on-month increase in September trading volume to 2,226,522 contracts, with a daily average of 101,206 contracts. Margin deposits at month-end stood at ¥570.435 billion, down ¥3.567 billion month on month. The most heavily traded currencies, in order, were the Turkish lira, US dollar, Mexican peso, South African rand and Hungarian forint.
TRY/JPY was the most actively traded pair, with 871,264 contracts, up 30.7% month on month. At the beginning of the month, expectations for an additional BOJ rate hike and weaker-than-expected US employment data drove yen buying, sending TRY/JPY lower. After expectations for a rate cut receded at the September monetary policy meeting, the market shifted to a wait-and-see stance, and the pair moved within a narrow range in the second half of the month.
Click Kabu 365 recorded a 11.2% month-on-month increase in September trading volume to 3,782,997 contracts, with average daily trading volume of 200,215 contracts, also up month on month. Month-end margin deposits stood at ¥96.062 billion, down ¥7.257 billion month on month.
With the Federal Open Market Committee (FOMC) and the BOJ monetary policy meeting scheduled for the end of the month, USD/JPY is expected to remain capped on the upside but supported on the downside. EUR/JPY could continue to probe lower levels amid lingering political and fiscal uncertainty in France. Expectations for an additional BOJ rate hike are also expected to support the yen, although some market participants believe these factors have already been priced in.