Japan’s “Mrs. Watanabe” phenomenon is helping drive bitcoin and cryptocurrency prices, according to Reuters. It refers to the country’s extensive retail trading base, so powerful it has the power to move markets.
The term “Mrs. Watanabe” emerged after Japan discovered everyday housewives had found a passion for foreign currency trading in the past couple of decades. These amateur retail traders earned (and lost) fortunes trading currencies online.
Older Japanese have painful memories of the 1980s stock market and real estate bubbles. Speak to investors from that era and you’ll hear painful anecdotes of what happened in the early 90s, when it all came crashing down. Japanese markets and the economy have been in the doldrums ever since, in what economists call the “lost decade/s”.
Confidence in the stock market is still low, as the Bank of Japan keeps companies afloat by investing heavily in stocks. With government debt levels among the world’s highest at 200+ percent of GDP, people wonder how long it can last.
As a result, Japanese investors have a preference for FX, or foreign currency trading. Add Bitcoin and cryptocurrencies to the mix, and you have enticing new opportunities.
The Mrs Watanabe phenomenon isn’t limited to Japan. Speculators in South Korea next door are also waking up to crypto’s fast gains and volatile trends.
Japanese Retail Market Is ‘World’s Largest’
QUOINE exchange CEO Mike Kayamori made similar comments recently in a speech to the Foreign Correspondents’ Club of Japan. Also referring to “Mrs. Watanabe”, Kayamori said the Japanese retail FX market is the world’s largest.
Additionally, he said, Japan has a craze for loyalty point programs not present in other countries. While Western consumers would prefer straight-up discounts, Japanese prefer to collect store points, with wallets full of plastic cards for each store they frequent. This means they’re well used to the idea of spending non-money, digital tokens.
Reuters quoted 55 year old Mutsuko Higo as saying “After I first heard about the bitcoin scheme, I was so excited I couldn’t sleep. It’s like buying a dream … Everyone says we can’t rely on Japanese pensions anymore,” she said. “This worries me, so I started bitcoins.”
Higo, a full-time worker and not actually a housewife, reflects both the enthusiasm for new investments and despair for Japanese government economic policy.
Regulations May Limit Tokens Available to Trade
This is all great news for Japan’s new crop of cryptocurrency exchanges. However, QUOINE’s Kayamori noted Japan’s regulator, the Financial Services Authority (FSA), would only permit certain digital tokens for now.
At the moment that’s only bitcoin and Ethereum’s ether. Adding other currencies and tokens would complicate the compliance process, Kayamori said. On 1st June, QUOINE launched a new multi-token, non-fiat exchange called QRYPTOS — but it’s available only for customers outside Japan.
Japanese cryptocurrency businesses have until 1st October to prove compliance with the new regulations.
If the exchanges achieve full compliance and the FSA broadens its horizons, there could be even more opportunities to the Mrs. Watanabes. Once that happens, there could be another new injection of yen.
Could amateur traders be the key to crypto trading in Asia? Let’s hear your thoughts.
Images via Pixabay, Jon Southurst