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Developments in and Characteristics of Japan's FX Market: An Analysis Based on the 2022 BIS Triennial Central Bank Survey

Author

Listed:
  • Kota Watanabe

    (Bank of Japan)

  • Kyosuke Hari

    (Bank of Japan)

  • Natsu Sawada

    (Bank of Japan)

  • Hidemi Bessho

    (Bank of Japan)

Abstract

In 2022, foreign exchange (FX) markets saw a rapid and significant depreciation of the Japanese yen (JPY) against the U.S. dollar (USD). Based on the results of the Triennial Central Bank Survey conducted by the Bank for International Settlements (BIS) in April 2022, this paper explores FX turnover in Japan -- which reached a historical high since the start of the survey -- by currency, type of instrument, and counterparty. It then examines the impact of the increase in FX turnover on the USD/JPY exchange rate. In addition, it explains the background of the long-term downtrend in the share of Japan in the global FX market through a comparison with global survey results, mainly by analyzing turnover by currency.

Suggested Citation

  • Kota Watanabe & Kyosuke Hari & Natsu Sawada & Hidemi Bessho, 2023. "Developments in and Characteristics of Japan's FX Market: An Analysis Based on the 2022 BIS Triennial Central Bank Survey," Bank of Japan Review Series 23-E-4, Bank of Japan.
    • Handle: RePEc:boj:bojrev:rev23e04
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    More about this item

    Keywords

    Foreign exchange; Turnover; Market structure;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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