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July 28th, 2010 at 6:02 pm

Japan FX leverage changes

in: General

Good to watch for more downside risks – some may say “capitulation” of AUD/JPY, NZD/JPY, including EUR/JPY, USD/JPY long positions by Japanese margin traders / Mrs Watanabe ahead of FSA margin trading rule change from August (Search FSA). Recap from BBG: “The government will cap debt used to boost trading bets, or leverage, at 50 times committed cash from next month, down to 25 times in 2011, the FSA decided last year.” On FX, talks Japanese retail community generally long AUD/JPY and USD/JPY and many accounts utilise the whole of their 100:1 leverage, with some talks there are still traders who have not reduced their leverage, with some platforms leaving it until 1st August as well. Some large platforms have told investors they have to “de-lever” before Monday market opens or have till 7.15am Tokyo time (2215GMT). Other report that positions that do not meet new margins will be closed en-masse at 000GMT

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