Tokyo takes on N.Y. in forex
NZPA-Reuter Tokyo Japanese currency dealers and analysts believe the deceptively-quiet Tokyo foreign exchange market may have overtaken the New York market to become the world’s second largest behind London. A survey of foreign exchange volumes completed in March, 1986, by the Bank of Japan, the Bank of England, and the United States Federal Reserve put Tokyo in third spot, just behind New York. But growth spurred by Japan’s cash-rich institutional investors appears to have driven Tokyo volume past that of New York.
“Japanese dealers are coming back from New York and they judge that from the size of one shot (order) Tokyo is larger,” a dealer said. “It is not rare in the Tokyo market to have shots of $lO million or
SISM, but in New York it is not as common.” Dollar-yen trade dominates in Tokyo, accounting for an estimated 80 per cent of daily turnover. Traders show relatively little interest in other currencies or in cross-rate trading. “Dollar-yen is really bread and butter in Japan,” said Mr Tsunehiro Nakayama, manager at the Industrial Bank of Japan. “There is a lot of real demand in this country for sales and purchases of the dollar, there is huge outside investment by Japanese institutional investors,” Mr Nakayama said. The size of the dollaryen trade usually helps keep daily fluctuations in a narrow 0.30 to 0.50 yen range, dealers said.
Day-to-day movements, however, are influenced largely by economic data released by the United States.
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Press, 12 October 1988, Page 37
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248Tokyo takes on N.Y. in forex Press, 12 October 1988, Page 37
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