Foreign Exchange Trading Becoming Popular Among Foreign Residents

550,000 yen became 800,000 yen in two years
Saving money in foreign currencies is becoming more common among foreign residents in Japan. Mr. WHITE, a businessman who came to Japan two years ago from New Zealand, has saved some of his yen income in his country's currency, New Zealand dollars. Even if you save money for one year in a fixed term deposit in Japan, the interest is only 0.03 percent a year, while it is 6 percent in New Zealand dollas.

The 10,000 dollars Mr. White saved two years ago became 11,200 dollars thanks to the higher interest rate. In addition, the exchange rate of the New Zealand dollar against the Japanese yen two years ago was 55 yen to the dollar and has now risen to 73 yen (December 5, 2004). If Mr. White had saved this money in Japanese yen, his savings would only have become 553,000 yen, but it is now 800,000 yen when his foreign currency savings are converted into Japanese yen. The calculation process is shown below.

As you know, a handling charge is paid whenever you buy or sell foreign currency. The amount differs by currencies and financial institutions. Generally the less sought after the currency is in Japan, the higher the handling charge will be. The handling charge for US dollars is two yen for both buying and selling. For New Zealand dollars, it is four yen, double that for US dollars. In short, Mr. White bought 10,000 dollars at the currency rate of 55 yen per dollar, but it became 57 yen when the handling charge of two yen was included, resulting in a total payment of 570,000. If he sells it now, the exchange rate is 73 yen, but as a two yen handling charge per dollar is required, the effective rate becomes 71 yen. The total amount he receives is about 800,000 yen including the interest. This means he has paid a 40,000 yen handling charge.

The handling charge of "Nittan FX Direct" is one twentieth that of the bank's
This is how Mr. White has increased his savings by using foreign currency. "I am lucky as the New Zealand dollar has risen. A drawback of foreign currency savings is high handling charges. Even if a particular foreign currency increases just a little, sometimes you will lose by paying the expensive handling charge. A more efficient use of funds is the "Nittan FX Direct" method to which I am shifting my foreign currency savings to. You can start easily with 10,000 of any currency through the Internet. You can buy and sell currency anytime and furthermore, the handling charge is only 0.05 yen per dollar. So, all of my foreign acquaintances in Japan are doing this." he says when describing the method's benefits.

Users can buy or sell, 24 hours a day in real time. The characteristic of this trade is that it is based on deposits. It becomes possible to trade more that 10 times the amount with only a small amount of money. You may trade one million yen of foreign currency with less than 100,000 yen of your money. Although the exchange rate poses a risk, if one US dollar increases from 100 yen to 110 yen, your profit will be 100,000 after trading only 10,000 dollars. This means the value of your investment doubles. It is also attractive that the exchange handling charge is one twentieth of a bankfs.

Through "FX1" you can learn Foreign Currency Trading Like a Game
Even trading with 100,000 yen may cause some uneasiness. Central Tanshi On-line Trading, Co. Ltd., an expert in foreign currency trading, is providing a virtual FX trade site "FX1" (http://www.fxone.net) and holds a regular contest. Supposing they invest 500 million yen, they compete to see how much they can increase their assets by. Since higher ranking winners can win great prizes such as a 45-inch liquid crystal TV set, 400,000 yen travel coupons, and so on (total amount of prizes is 12 million yen), it is gaining popularity. Even if you lose, you actually lose nothing. Anyone regardless of age, nationality and sex can join as long as you have an e-mail address.

The Customers' desk of the Central Tanshi Online Trading advises those considering foreign currency investment, "The foreign exchange market is the largest financial market and operates 24 hours a day. While the spread of the Internet has made it easy to start trading and profiting from foreign exchange by investing in high interest foreign currencies, you have a risk of losing money too. Risk management is very important when you invest so it is better to practice and get used to it first. Why don't you start with virtual exchange trading eFX1f? If you are a foreign resident, we recommend you start with your county's currency, US dollars or Euro."

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