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Electronic Foreign Exchange Trading (e-FX): Developments in and implications for the Tokyo FX Market

Author

Listed:
  • ONISHI Fuyuko

    (Bank of Japan)

  • HIRAI Yuichiro

    (Bank of Japan)

  • ARUGA Ryo

    (Bank of Japan)

  • BESSHO Hidemi

    (Bank of Japan)

Abstract

In the foreign exchange market, electronic trading (e-FX) has developed and expanded, bringing benefits such as lower trading costs and more trading options. To take advantage of these benefits, e-FX customers need to choose appropriate trading venues and methods. In addition, the development of e-FX has led to a fragmentation of liquidity in the foreign exchange market, making it more difficult to monitor market trends, and there are concerns that price discovery in the foreign exchange market may be undermined in the future. Furthermore, as the e-FX infrastructure advances internationally, the presence of the Tokyo market as a financial center may be affected, involving an outflow of foreign exchange transactions.

Suggested Citation

  • ONISHI Fuyuko & HIRAI Yuichiro & ARUGA Ryo & BESSHO Hidemi, 2025. "Electronic Foreign Exchange Trading (e-FX): Developments in and implications for the Tokyo FX Market," Bank of Japan Review Series 25-E-4, Bank of Japan.
    • Handle: RePEc:boj:bojrev:rev25e04
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    More about this item

    Keywords

    Foreign Exchange Market; Electronic Trading; Market Structure;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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