I have reviewed and analyzed the Japanese Forex market to compile my ranking of Forex brokers in Japan. I have also included tips for starting Forex trading in Japan to shorten beginners' learning curves and help them avoid mistakes.
- Plus500, multi-asset and CFD broker.
- FXTM, Best all-around broker with high floating leverage and fast execution.
- Octa, A commission-free broker with a proprietary copy trading service.
Comparison of the Forex Brokers in Japan
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Regulators | ASIC, CySEC, FCA, FMA, FSCA, MAS | CMA, CySEC, FCA, FSC Mauritius, FSCA | CySEC, FSCA, MWALI International Services Authority |
Year Established | 2008 | 2011 | 2011 |
Execution Type(s) | Market Maker | ECN/STP, Market Maker | Market Maker |
Minimum Deposit | |||
Average Trading Cost EUR/USD | 1.3 pips | 0.1 pips | 0.9 pips |
Average Trading Cost GBP/USD | 1.7 pips | 0.2 pips | 1.3 pips |
Average Trading Cost Gold | $0.34 | $0.18 | $0.30 |
Trading Platform(s) | Proprietary platform, Web-based | MetaTrader 4, MetaTrader 5, Proprietary platform | MetaTrader 4, MetaTrader 5, Proprietary platform |
Islamic Account | |||
Negative Balance Protection | |||
Get Started Visit Website82% of retail CFD accounts lose money | Visit Website | Visit Website |
Plus500
In Summary multi-asset and CFD brokerPlus500 maintains a well-balanced asset selection, including options, ETFs, and cryptocurrencies. Due to its competitive, commission-free cost structure, I rank Plus500 high on my best Forex Brokers Japan listing. Traders manage portfolios from a user-friendly, web-based proprietary trading platform and mobile app. It only supports manual trading but has a sentiment-based indicator, and traders benefit from the data-driven analytical tool +Insights.
Traders also receive real-time email, SMS, and push notifications based on price alerts, percentage-based hourly and daily price changes, and sentiment changes among buyers and sellers. Other benefits include ESG scores, a fee-based guaranteed stop-loss order, and fast withdrawals.
Pros & Cons
- Broad asset selection in equities and options
- Free and unlimited demo account
- Advanced free-of-charge analytical trading tools
- Global and regulated fintech platform
- Sub-standard trading platform without support for automated or social trading
FXTM
In Summary Best all-around broker with high floating leverage and fast executionFor a minimum deposit requirement of $500, the FXTM Advantage account delivers ultra-low trading fees featuring raw spreads from 0.0 pips for a commission between $0.80 and $4.00 per 1.0 standard round lot. Expanding the cost advantage for FXTM traders is a cutting-edge price improvement technology that lowers trading fees by an average of $3.00 per lot with excellent order execution. Therefore, I rate FXTM as one of the top Forex Brokers in Japan.
FXTM offers MT4 and MT5, its proprietary FXTM Invest copy trading service, and its user-friendly mobile app FXTM Trader. Beginners receive quality education, including podcasts.
Pros & Cons
- Excellent commission-based Forex pricing environment and transparency
- Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
- Quality market research and educational content for beginner traders
- A highly regulated broker with a tier-1 license
- No cryptocurrencies and limited choice of commodities
Octa
In Summary A commission-free broker with a proprietary copy trading serviceFounded in 2011, Octa is a “Straight Through Processing” (STP) broker, which means they do not have an internal dealing desk. They simply connect buyers and sellers directly. With this model, Octa aims to be more cost-effective than anyone else in the market. They offer low spreads and claim 97.5% of trades are executed without slippage.
Octa offers their clients a choice of three Forex trading platforms: the world’s most popular MetaTrader 4 (MT4) and MetaTrader 5 (MT5). All of these can be traded as a desktop application, and on Android and iOS devices.
Octa is an unregulated broker but continues to earn the trust of traders around the globe, with more than 1,500,000 accounts opened. One reason for the ongoing success of this market maker is appealing bonus campaigns. This broker paid out almost $3,000,000 in bonus funds. Octa offers traders the MT4 and MT5 platforms, and a proprietary mobile trading platform. Octa additionally grants their clients Autochartist, but traders require a Silver Level in the Status Program. Traders have a choice between fixed and floating spreads, and the overall cost structure remains competitive.
Asset selection remains the distinct weakness at Octa, making it most suitable for new retail traders. A series of short educational articles offers a basic Forex introduction, and this broker maintains an excellent arsenal of research and analytics tools.
Octa Pros & Cons
Pros & Cons
- Quick withdrawals and deposits
- 0% commission and no overnight charges
- Space with personalised trading ideas
- Customer Support 24/7
- Mobile copy trading services available only for Android
Forex Trading in Japan
Japan only accounts for roughly 6.0% of daily global Forex trading volumes but remains a core global Forex trading centre. The Bank of Japan is one of the most active central banks and frequently intervenes in the Japanese Yen, affecting its exchange rates. The Japanese Yen is the third-most traded currency, and due to the historically low-interest rate environment, the Japanese Yen is heavily used for carry trading. My Forex Brokers in Japan listing concludes that the Japanese Yen is a safe-haven asset.
What to Look for in a Forex Broker from Japan
My Forex brokers in Japan listing focused on the criteria below.
Traders should look for the following:
- Regulation - A clean regulatory track record exceeding ten years.
- Low trading fees - Low trading fees and swap rates.
- Trading platforms - Algorithmic, copy, and mobile trading support.
- Asset diversity - A balanced asset selection.
- Deposits/Withdrawals - No deposit fees and low minimum requirements.
Forex Trading Regulations in Japan
The Japanese Financial Services Agency (JFSA) regulates domestic brokers via the Financial Instruments and Exchange Act (FIEA). It includes a mandatory membership with the Japan Investor Protection Fund (JIPF), covering traders up to ¥10 million.
How Much Is Forex Leverage in Japan?
The JFSA restricts Forex leverage to 1:25 for Japanese Forex brokers, which ranks among the most restrictive compared with other developed markets. Japanese traders can open offshore accounts with brokers like the ones listed here who accept Japan-resident traders.
How to Start Forex Trading in Japan?
Traders can consider the tips below before opening an account with brokers from my Forex Brokers Japan listing. They will shorten the learning curve and highlight areas of study they must focus on.
My Forex Trading Tips
1. Begin with quality, in-depth education.
2. Respect Forex trading as the high-skilled profession it represents.
3. Master trading psychology, as it separates up to 90% of unprofitable traders from profitable ones.
4. Study the relationship between leverage and risk management.
5. Realize that leverage will equally magnify profits and losses.
6. Risk management is as important as having the right trading strategy.
7. Choose a trading strategy that reflects your personality.
8. Low trading fees determine a competitive trading environment.
9. Learn how to place the take profit and stop loss levels properly.
What Is the Best Trading Platform in Japan
With 80%+ of daily Forex trading volume algorithmic, MT4 is the best trading platform in Japan. As the leading algorithmic trading platform, it supports API trading, VPS hosting, and MAM/PAMM modules for traditional account management. It also has an embedded copy trading service. Traders can upgrade MT4 via 25,000+ upgrades.
Forex Trading Taxation in Japan
During the research, I found little helpful and verifiable data on how Japan taxes Forex traders. The only fact I can confidently state is that Forex traders pay taxes on their income and that Japan changed its Forex tax structure in January 2012. Forex income below ¥200,000 annually appears tax-free before a progressive tax rate between 5% and 45% applies. Japan also differentiates between OTC Forex trading and exchange-based Forex trading.
Therefore, Forex traders in Japan must consult a legal professional to seek tax advice in Japan to ensure compliance with local rules and regulations.
Pros and Cons of Forex Trading in Japan
Forex traders should consider the pros and cons of Forex trading in Japan before opening and funding a trading account with one of the best brokers in the Country.
Pros of Forex Trading in Japan
- 24/5 decentralized market
- Lower capital requirements
- Low-latency algorithmic trading
- API trading
- MAM/PAMM accounts
- Passive income opportunities
- Copy and social trading via mobile apps.
Cons of Forex Trading in Japan
- Manual trading in an algorithm-dominated market.
- Forex is perceived as something other than trading as a high-skilled profession.
Bottom Line
Japan is the fifth-largest Forex market, trailing London, New York, Hong Kong, and Singapore, but the Japanese Yen is the third-most traded currency. Forex trading in Japan is widespread, and domestic Forex brokers and banks maintain a dominant role among Japanese-resident Forex traders. Traditional account management via MAM/PAMM accounts and algorithmic trading rank among the most popular strategies.
My Forex Brokers in Japan listing provides Japanese-resident traders with a competitive trading environment. Japan also ranks among the wealthier Forex markets, but foreign brokers struggle to penetrate the market significantly.
