Question

Hello Anna, Could you please explain more about the Brazilian Real and Japanese traders? You made the comment at the end of your Forex training – forex questions answered! 16/01/2014, 33:54.

Answer

Hi – Many thanks for your email and apologies for the delay in replying. This has been due to a combination of problems with email forwarding and my mis-filing several 100 emails! In my reference to Japanese traders (aka Mrs Watanabe) & the Brazilian Real I was making two points: first merely to highlight how the Japanese players dominate the forex market and account for over 30% of the retail volume. Much of this is from the ubiquitous Mrs Watanabe. Second, these traders tend to move en masse in their search for high yields of which the Brazilian Real was one, and others include the Mexican Peso, South African Rand & Indonesian Ruppiah. Whilst the inflows into these economies (usually in the form of specialist bonds) is rapid, the outflows will be equally rapidly, making these currencies extremely volatile and also reflecting flows back into the Yen. Hope the above clarifies this for you. Kind regards.