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Singapore still chasing Tokyo in FX

Singapore still chasing Tokyo in FX

(Asia) - Notwithstanding a slow economy and restructuring of Japan's banking sector impacting FX volumes hubbed out of Tokyo, it still likely leads volume in the region. Much comment has centred recently, led in several instances by the Intelligent Island's PR factories, on Singapore overtaking Tokyo in FX business for the region. The two centres are significantly different, with Singapore leading the trade in a range of east Asian currencies and Japan's FX market focussed on domestic players where about 70 percent of transactions involve dollar-yen trades.

The Bank for International Settlement's most recent survey in April last year confirmed Tokyo as the third biggest foreign exchange market in the world after London and New York, handling a daily turnover up 8.1 percent over the previous three years at US$146.8 billion, relative to Singapore's US$101 billion.

However, Tokyo's spot trading has definitely slipped with daily average dollar-yen spot turnover under US$10 billion for most of 2001 (this only occurred in a single month 4 years ago) according to recent Bank of Japan data.

The industry still see international banks having to keep strong positions in Tokyo with Japan's economy considerably bigger than the rest of Asia's combined.
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