When I joined Nomura, my Japanese trainee asked me if I knew any good Japanese FX traders. “No. Sorry,” I replied. “I don’t.”
His reply startled me. “That’s because Tom-san (Tom Eliot, our boss) says there aren’t any.” It used to be a standard joke in FX. The Japanese were rightly feared for the volumes they used to suddenly pump into the market, but few dealers were ever respected for their prowess. I know of one who, when things went wrong, asked why he couldn’t put his loss into the bank’s pension fund.
However, things seem to have changed. Much has been made again this week about the impact Japanese housewives are having on the market. For those who haven’t seen the comments made by Bank of Japan board member Kiyohiko Nishimura, here they are again: “The arrival of Japanese households as major investors seems to have affected foreign-exchange markets. The gnomes of Zurich were accused in their day of destabilizing markets. The housewives of Tokyo are apparently acting to stabilize them.” Of course, the worry is what will happen if something does trigger a rise in volatility.