Why The Japanese Futures Market Has Lost Its Ground?

In terms of economy, Japan is among the world's leading countries. But, in the recent years, the Japanese economy has faced major problems and setbacks. These setbacks have also affected the Japanese Futures Market together with the Japanese stock markets. This development is of great significance because of various compelling reasons.

The first and the foremost reason that is important in the context of Japanese stock market is that Japan was the first country that started commodities future exchange. But Japan is not the leader anymore in terms of futures exchange. It is now loosing its business to the various exchanges of USA, namely, New York and Chicago.

Japan is badly affected by its flagging economy. The share market is hitting low, and the Futures Market is no exception. Only in the last year, all the seven commodities exchanges of Japan fell by almost 22 %. This had an opposite effect on the New York's Mercantile Exchange where trading rose by 25%. This shows that the loss of Japanese markets area has been direct gains for other futures markets.

There is a serious problem with Japan. Despite being the first nation to start commodities futures exchange, it is lacking somewhere to match up the global market and standards. Rising prices of oil and gold in the global market is one of the reasons behind this.

The trading hours is also a major point of concern. Only one out of seven futures exchanges of Japan provides the facility of online trading. The rest of them do not give you the facility to trade in the after hours. This is also one of the reasons, which is preventing the potential investors from trading in Japanese futures market. This lack of online trading facility gives other exchanges a significant edge over Japanese futures exchange.

Another reason cited by the experts for the decline of business from the futures market of Japan is that in this globalized age of Internet, seven exchanges in Japan are too many. They suggest that rather than having seven exchanges, Japan should go for lesser exchanges, and also provide the facility of online trading and trading facilities after the usual hours.

So, there are many drawbacks in the working system of the Japanese futures market, which are crippling it, and which have made it the first Futures Market in the world that has almost its shine and zest.