Artificial Intelligence, Markets, and Computers | Episode 11: The Miracle of the 1990s [Naomura Okumura]

Naoshi Okumura Profile

Okumura Hisashi. Graduated with a Master’s in Engineering in 1987. Field of study: AI (Artificial Intelligence). Developed numerous mathematical models at Nikko Securities. Co-developed an investment model with Stanford University professor Dr. William Sharp (1990 Nobel Prize in Economics) and achieved the world’s first online distribution of Tokyo Stock Exchange prices. Furthermore, established venture companies with Israeli Mossad science advisors, commercialized AI technology, and implemented it at major airports, achieving many results at the intersection of finance and IT. Currently offering an AI-rated analyst rating model “MRA,” an AI-forecasting tool for near-future FX rates “FXeye,” and a chart analysis tool displaying risk and return “Twilight Zone.” To raise Japan’s financial literacy, he also hosts a Financial Literacy School.

Hobbies include audio and sports. Began aerobics competition 15 years ago, NAC Master Division singles champion 9 consecutive times, 2016 Senior 2nd place, 2014–2016 Japan Championship Chiba Prefecture representative, 2017–2018 Japan Championship Master 3 runner-up. Although he boasts athletic prowess, he is actually a “non-swimmer,” and struggles with ball sports. His motto is “It is never too late to make any decision.”

Blog:https://okumura-toushi.com/

※ This article is a reproduction/edited version of articles from FX攻略.com’s February 2021 issue. Please note that the market information in the main text may differ from current market conditions.

Pay attention to the BIS-published foreign exchange trading volume

The Bank for International Settlements (BIS) is an international cooperation organization of central banks worldwide, and it conducts a survey of global foreign exchange trading volumes every three years.Latest reportis from 2019.

According to it, the daily trading volume was $6.6 trillion (as of April 2019), which, when converted at the then-dollar-yen rate, was about ¥740 trillion. The Tokyo Stock Exchange’s daily trading volume in 2019 was below ¥4 trillion, meaning there were over 180 times more trades. The New York Stock Exchange, the world’s largest securities market, has about three times as much trading as TSE, yet compared to it, there is more than 60 times as much trading.

Stocks and bonds trade in roughly similar magnitudes, but the FX market operates daily on an overwhelming scale that surpasses them. Incidentally, actual trade for commercial purposes accounts for about 10%, while 90% is financial trading.

In 2019, the share of the dollar among currency pairs was 88.3%, followed by the euro at 32.3%, the Japanese yen at 16.8%, and the pound at 12.8%. Let’s view this decade’s trading volume share trends in a graph (Figure 1).