OFF INTO THE WILD WET YONDER How does this...
A little known fact about Japanese housewives is that they love to speculate in the markets. Even my wife liked to trade the mini Nikkei 225 futures contracts, disappearing into the bathroom at work to place her trades. She won some, lost some, and learned some. But all of it was a thrill. With little ones running around the house in diapers now, those days are on hold for a bit.
Anyhow, Japan is the largest retail foreign exchange (FX) trading market in the world thanks to “Mrs. Watanabe” (the industry’s nickname given to these trading housewives). Global retail FX trading volumes are north of US$300 billion average daily volume (ADV), and Japan is a substantial portion of that volume at an estimated US$100+ billion.
After the financial crisis of 2007–08 fear and panic took over, and the retail FX market in Japan saw a substantial drop in volume. It has been on a steady rise ever since, though, and now, thanks to “Abenomics,” things have popped up in trading volume dramatically.
Mrs. Watanabe is Betting on the Yen’s Further Weakness
Abe’s magical money printing machine and the national sales tax hike that took effect April 1 of this year has not been kind to the savings accounts of the best savers in the world, and Mrs. Watanabe is not taking this lying down. Masakazu Sato, an FX advisor at Gaitame, reports via Bloomberg, “We’re seeing the number of applications for our seminars increase as these Mrs. Watanabes seek to protect their livelihoods.”
With added leverage like this, Prime Minister Shinzo Abe should have no problem reaching his inflation goals. Let’s just hope that all that printing, leveraging, and selling of Japanese yen doesn’t spin out of control and wipe the savers out completely… otherwise you might see these Mrs. Watanabes rioting in the streets. Hell hath no fury like a Japanese housewife scorned.