This article is for Japanese or people who can open bank account same as Japanese in Japan.
We hear FX is high risk trade but not always. It’s caused by big volume transaction so lower risk with less transaction volume.
I transferred all my money deposited in foreign currency account of bank in Japan to FX account once I realized the advantage of FX.
Generally in Japan, there are differences between personal FX account and bank account in Japan as of Dec. 2019.
| FX | Foreign Currency account in bank | |
| 1. Commission Charge | Lower | Higher |
| 2. Efficiency of capital(Reverage) | Up to 25 times of capital | Within amount of capital |
| 3. Asset Protection | Asset is protected basically as far as it’s managed separately from FX provider’s asset in its bankruptcy | No protection in bankruptcy of bank |
1. Commission Charge
The more frequent transaction, the more advantage than foreign currency account in bank because of the lower commission charge.
2. Efficiency of capital (Reverage)
For example, considering we have JPY1M of capital, we can buy/sell foreign currency up to JPY1M in the bank account but up to JPY25M in FX account.
3. Asset protection
While no protection in bankruptcy of bank as payoff isn’t applied, our asset is protected as far as it’s managed separately from FX provider’s asset in its bankruptcy. We should select FX provider which manages our asset completely separated.
