Japanese Traders Guide
Japan is a country that manages to blend the traditional and the modern in a timeless manner. As a nation, they seem to do everything well. When it comes to binary options, Japan is one of the few countries that have exact rules and standards of practise. It is one of the most regulated markets in the world.
This is excellent news for those who wish to trade, of which many residents do. In addition to the heavy regulation, Japan also releases regular data on market conditions, trading news, regulated and unregulated brokers and scams. It is also a requirement of the FFAJ (Financial futures Association of Japan) to measure every client's suitability for trading.
There are a few Japanese brokers licensed to trade, enough to make it a lot easier than usual to find the right broker. In addition to this, our information helps you to narrow your selection further. We review and rate each one, bringing you information on every aspect of trading to allow you to find the broker that best meets your requirements.
In this article, you will learn:
- The brokers best suited to your needs
- What local payment methods are accepted
- Taxes and fees that apply to JP residents
Traders in Japan
There are so many reasons to use a good, local broker or a broker that is licensed and regulated in Japan. From the welcome bonuses to the volume of assets available to trade on, here are just a few things to look out for:
Range of Assets
Whether you are looking to trade in currencies, stocks, indices or commodities, many brokers offer an extensive selection. Some even offer trading robots to automate your asset selection. A variety of asset types is an essential factor to consider when choosing a local broker. Do they provide assets that you like to trade? Perhaps a local broker offers some that aren't offered by international brokers.
Types of Trades
Japan regulates the market so tightly that any options with an expiry time of fewer than 120 minutes are banned. This ban means that 60 seconds, 90 seconds, 30 minutes etc. are unavailable to trade. In addition to this, some types of options are restricted as well, so some of the more complex trade types aren't available.
While the global binary options consensus is to regulate the bonuses offered, most brokers do provide a bonus to encourage you to open an account. These bonuses are either no deposit bonuses so that you get your first, or first few trades, for free or they offer deposit bonuses. It is important to recognise that a bonus is unavailable to withdraw until it gets traded a certain number times. Some brokers require $1,000,000 of trading to take place before a bonus is available to withdraw.
To get familiar with trading before you risk your capital, many brokers offer a demo account. A demo account is a simulated version of the live platform and you are given virtual funds to trade with. What this does is allow you to get used to the platform and the various functions before you are thrown in at the deep end with real money.
Broker Fees And Tax
For residents of Japan, all sources of income are subject to tax. It doesn't matter if the was tax earned on worldwide or local revenue. Everything is subject to tax. Tax is based on the income over a year and is self-assessed or withheld as per many other countries. So, any earnings on binary options trading in Japan, that are over the tax threshold will be subject to income tax.
For non-residents, they will be subject to income tax on earnings in Japan and not worldwide income. To ensure that you keep an accurate record of your trading activity, you will need to record both your profits and losses. Remember that you can offset one against the other. At the end of the financial year, you can calculate the profit you have made and figure the income tax owed.
When it comes to fees, while they are not large fees, there are a few to consider. First of all, is the commission that you pay on successful trades. The commission will be deducted at source before you receive your payout. Then, in addition to this are transaction and withdrawal fees. Most brokers will charge a fixed fee for every withdrawal you make which is the cost of processing the withdrawal.
Then the credit card or electronic wallet provider may charge a further fee. If trading in US dollars, you will also need to consider the conversion fee back to the YEN. While all of these fees are small, they soon mount up. Make sure that you make fewer, smaller withdrawals and that you are aware of the various fees.
Nowhere else will you find a financial trading market as heavily regulated as Japan, except maybe Turkey. With a reputation for having the tightest market regulations in the world, the FFAJ are more involved with the binary options market than most. They go to extraordinary lengths to ensure that they highly regulate the industry.
The regulation includes ensuring that brokers vet clients for suitability before allowing them to trade. There are only just over 11,000 traders in Japan which isn't an awful lot when you consider the population. Despite this, the number of people trading continues to grow steadily. Unlike most other countries, Japan also releases monthly data about the market which includes:
Other trading restrictions extend to the type of options available. Not only are they restricted to more simple trade types but the expiry times are heavily regulated as well. It is forbidden for brokers to offer any options with expiry times of less than 120 minutes.
Because of the strict guidelines, you can enjoy a much more reassuring binary options trading experience in Japan. You are less likely to encounter an undesirable or scam broker, and the brokers that you can choose from are some of the best in the world. In addition to this, if anyone has a potential risk of financial difficulty, they are not allowed to trade.
This is excellent news for those who wish to trade, of which many residents do.
How we Recommend Brokers
We go to great lengths to ensure that we provide you with accurate and up to date information that allows you to choose the right broker. Our team of financial experts carry out thorough research of the market, trading themselves so that they can analyse each broker.
They will examine the various aspects of trading including welcome bonuses and deposits, demo accounts, payouts, trade types and customer service. They also check the licensing and regulation of each broker to ensure that your money is safe. Our mission is to make sure that we only present you with the best the market has to offer.
When selecting a broker, we offer a very detailed analysis to help you to make your decision. Not only do we review and rate the brokers, but we also carry out a comprehensive analysis of the market. We research the trading laws and regulation of each country and the industry in general.
We also review the various trading tools available which include automated trading software or robots. We pride ourselves on offering information that is accurate, up to date and relevant with an ultimate goal of making sure you get the very best out of your binary options trading experience.
Frequently Asked Questions
Is binary trading in Japan legal and safe?
When trading in binary options in Japan, you need to understand that nowhere in the world is the market more regulated. So yes, in short, trading in Japan is safe and legal, more so than in any other country.
Do I need to pay fees and taxes on my profits?
The short answer to this is yes! If you are earning an income through binary options trading, that is above the tax threshold; then you will need to pay tax on the profits you make.
Can I test brokers before trading with real money?
If the broker that you choose to trade with offers a no deposit bonus then you will be able to use this money before risking your own. The bonus may only be large enough for one or two free trades though.
Is it easy to make deposits and withdrawals?
Making deposits and withdrawals is a simple process. Withdrawals usually take a few days and are returned to the source of deposit.
Can I trade using my mobile or tablet device?
Given that trading in Japan is so heavily regulated that only the best brokers are licensed, you can be confident that they will offer mobile trading.
Robert has consulted for our website for five years and is a well-established member of the team. While he is passionate about the site, most of Robert’s time is focused on his current position as CEO of a professional coaching company.