FAQ
Contact
English
English
FAQ
Contact

Glossary

Glossary

We have compiled a list of FX-related terms. We hope it helps you deepen your knowledge of FX.

  • Additional Margin
    • Additional margin refers to having to deposit additional funds in margin trading, FX trading, CFD trading and the like when the unrealised loss on positions held exceeds a certain amount because of market movements. In a broader sense, it is also called a "margin call".
      In FX trading in particular, the situation where additional margin is a concern is when a loss cut is triggered but the loss exceeds the account balance, resulting in a negative balance. Domestic Japanese FX brokers charge customers additional margin in this case to cover the negative balance. For example, at the time of the Swiss franc shock, many domestic FX users were billed large amounts of additional margin.
      With overseas FX brokers that automatically reset negative balances to zero, no additional margin arises, so you can enjoy FX trading with peace of mind.
  • ADP Employment Report
    • The ADP Employment Report is a report on the change in the number of employees published by ADP (Automatic Data Processing), a US payroll processing company, based on its own survey; it is released on the first Wednesday of every month.
  • Alternative Investment
    • Alternative investment refers to investment in assets other than traditional investments such as investment trusts, stocks, bonds and real estate. Examples include private equity, hedge funds, venture capital, derivative products such as options, foreign exchange trading, commodities such as oil and gas, precious metals and crypto assets.
  • Analyst
    • An analyst is a specialist who analyses issues in politics and economics, including their causes and trends, and makes recommendations.
      In the financial industry, analysts analyse companies' finances and performance, assess their future prospects and provide the information needed for investment decisions.
      In FX trading in particular, analysts provide trading advice by making full use of technical analysis, which studies the movements of exchange-rate charts, and fundamental analysis, which examines the outlook for statements by key government officials, national economic indicators, corporate earnings and so on.
  • Anomaly
    • An anomaly is a phenomenon that is abnormal or cannot be proven in terms of a given law or theory. Anomalies exist widely in many fields, including physics, astronomy and economics.
      In markets for stocks, currencies, bonds and the like, price formation and price movements that existing investment theories cannot explain have long been observed. In the investment world, an empirical rule that cannot be explained by investment theory but "may often prove right" is called an anomaly.
  • Arbitrage
    • Arbitrage is a trading method that seeks to profit from price differences between different markets. It is also sometimes called "arbitrage trading" or "spread trading".
      It is used in a variety of markets, including stock trading, futures trading and FX trading. In FX trading, arbitrage is carried out by buying and selling currencies to take advantage of price differences between FX brokers.
  • Arbitrage Trading
    • Arbitrage trading is a trading method that seeks to profit from price differences between different markets. It is also sometimes called "arbitrage" or "spread trading".
  • Ask
    • The Ask is the selling price quoted to investors in FX trading. The buying price quoted to investors, on the other hand, is called the "Bid".
      In FX trading, the difference between the Bid (buying price) and the Ask (selling price) is the "spread". The spread is a trading cost for the investor whenever an FX trade is made, and revenue for the FX broker.
  • Averaging Down
    • Averaging down means placing additional orders so as to lower your average trading cost when the exchange rate has moved in a direction you did not expect.
  • Balance of Payments
    • The balance of payments is a summary of all of a country's external economic transactions over a certain period. It can be thought of as a country's household account book, recording money received from abroad and payments made abroad.
  • Bank of Japan
    • The Bank of Japan (BOJ) is Japan's central bank; its paramount missions are price stability in Japan and maintaining the financial system. It was founded under the Bank of Japan Act promulgated in 1882.
  • Bear
    • Bear is a word for the bearish view that the market will fall from now on, used in market trading in general, whether stocks or FX. "Bear" is the English word for the animal; the image of a bear swiping its clawed paw downward from above came to be used as a metaphor for the market moving downward from above. Conversely, a bullish view is called a "bull".
  • Beige Book
    • The Beige Book is a report on economic conditions in each region compiled by the 12 regional Federal Reserve Banks of the United States; its official name is the "Summary of Commentary on Current Economic Conditions by Federal Reserve District". The 12 regional Federal Reserve Banks that take part in compiling the Beige Book are Atlanta, Boston, Chicago, Minneapolis, New York, Philadelphia, St. Louis, Cleveland, Dallas, Kansas City, Richmond and San Francisco.
  • Bid
    • Bid means that something has been sold, or executed, at a specific rate.
  • Bilateral Trading
    • Bilateral trading is a transaction carried out one-to-one between a seller and a buyer without going through a securities exchange or similar venue. It is also called "B-book trading", the "marry method", "over-the-counter trading" or "OTC (Over The Counter) trading". Bilateral trading is used by many FX brokers. The opposite approach is known as "A-book trading", the "ECN method", "NDD trading" and so on.
  • Blackout Rule
    • The blackout rule prohibits members of a central bank's policy meeting from making statements about monetary policy before monetary policy decisions are made. Its purpose is to prevent the stock and FX markets from moving because information about policy has been disclosed in advance. As an example of the blackout rule, in the United States FRB officials are prohibited from making statements about monetary policy for 13 days, from the Tuesday of the week before an FOMC meeting until the end of the FOMC.
  • BOE
    • The BOE (Bank of England) is the central bank of the United Kingdom, responsible for the UK's domestic monetary policy, the issuance of the pound and other functions.
  • BOJ Outlook Report
    • The BOJ Outlook Report is the medium- to long-term outlook for Japan's economy by the nine members of the Bank of Japan's Policy Board; its official name is the "Outlook for Economic Activity and Prices".
  • BOJ Tankan
    • The Tankan is the Short-Term Economic Survey of Enterprises in Japan. It is a statistical survey conducted by the Bank of Japan under the Statistics Act, with the aim of accurately grasping business trends nationwide and contributing to the appropriate conduct of monetary policy. It covers about 10,000 companies across Japan, and its results on economic trends are published in months that are multiples of three (March, June, September and December).
  • Box Market
    • A box market is a state in which the exchange rate repeatedly moves within a range with a fixed upper limit (high) and lower limit (low); it is called a box market because it looks as if it is inside a box. It is also called a range market.
  • Brexit
    • Brexit is a coined word referring to the United Kingdom's departure from the EU, which stemmed from the referendum of 23 June 2016; it is a blend of "British" and "Exit".
  • Bull
    • Bull is a word for the bullish view that the market will rise from now on, used in market trading in general, whether stocks or FX. "Bull" is the English word for a male ox; the image of a bull thrusting its horns upward from below came to be used as a metaphor for the market moving upward from below. Conversely, a bearish view is called a "bear".
  • Buy On Dips
    • "Buy On Dips" means buying at a point when the price has fallen from where it was when the forecast was made, or buying at the lower end of the forecast range; in other words, it means buying on dips. "Sell On Rallies" means selling at a point when the price has risen from where it was when the forecast was made, or selling at the upper end of the forecast range; in other words, it means selling into a spike.
  • Buying Back
    • Buying back refers to closing a sell position by buying it back through an offsetting trade. Unlike stock investment, FX trading allows you to start trading by selling (margin trading).
  • Buying Dollars in a Crisis
    • "Buying dollars in a crisis" refers to the phenomenon in which the US dollar, the world's key currency, is bought in times of crisis, such as the outbreak of war, conflict or large-scale terrorism. How exchange rates will actually move when a crisis occurs is uncertain, but this is based on the empirical rule that buying the US dollar, the currency with the largest circulation in the world, is a safe choice.
  • Buying on Dips
    • In the course of an uptrend in an exchange rate, there are moments at regular intervals when the rate falls. This slight fall is called a "dip". Conversely, a moment when the rate temporarily rises during a downtrend is called a "pullback" or "rally".
      Because dips are considered moments that tend to generate profit, holding a buy position aimed at these dips is called "buying on dips". Since a dip is called a "dip" in English, this is expressed as "Buy on dip".
      Dips typically occur because of sell orders to take profit on existing buy positions, or because of new sell positions entered in anticipation of a fall.
  • Capital Gain
    • A capital gain is a profit obtained from a change in the price of assets held, such as stocks or foreign currencies. In FX trading, a capital gain is also called a "foreign exchange gain". Conversely, profit obtained from swaps and the like is called an income gain.
  • Capital Loss
    • A capital loss is a loss arising from a change in the price of assets held, such as stocks or foreign currencies.
  • Carry Trade
    • A method of raising funds in a low-interest currency and investing them in a high-interest currency to earn the interest margin. When funds are raised in yen in particular, it is called the yen carry trade. It is a powerful means of raising and investing funds for institutional investors, hedge funds and others. Some take the view that when the yen carry trade accelerates, the yen tends to be sold, making it one of the factors behind a weaker yen.
  • Case-Shiller Home Price Index
    • The Case-Shiller Home Price Index is an economic indicator showing the level of US house prices, published monthly by S&P Dow Jones Indices, one of the world's largest index providers.
  • Cash Settlement (Contract for Difference Settlement)
    • Cash settlement is one of the methods of settling margin trades, in which no cash or physical goods are exchanged and settlement is made with the gain or loss arising from the price difference of the offsetting trade (the difference between the purchase amount and the sale amount). FX trading is settled in this way.
  • Central Bank
    • A central bank is the institution at the core of the financial system of a country or union of states. In Japan this is the Bank of Japan, in the United States the FRB, and in the EU the ECB. A central bank has the exclusive right to issue legal tender (notes and coins) and aims to stabilise prices by adjusting the money supply in the market. It is also the only bank that can provide funds directly to commercial banks, and it manages the government budget through the payment, receipt and custody of national treasury funds. Central banks are independent of governments and are positioned to make their own decisions on monetary policy. Central bank independence has been established to prevent governments, out of populism, from adopting short-sighted monetary policies that disrupt price stability.
  • Chart
    • A chart is a graph showing the movements of past exchange-rate prices. By analysing the movements of a chart, it is used in technical analysis to predict future price movements and the timing of trades. Depending on how they are drawn, there are various types of chart, such as candlestick charts, bar charts and line charts.
  • Chicago Mercantile Exchange
    • The Chicago Mercantile Exchange (CME) is North America's largest exchange for financial products and derivatives, located in Chicago, Illinois, United States, and owned and operated by CME Group.
  • Chicago Traders
    • "Chicago traders" refers to people who buy and sell currency futures on the Mercantile Exchange in Chicago, United States. In addition to ordinary professional traders, hedge funds, financial institutions, brokers and others are also included in this category.
  • Closing Out
    • Closing out means settling a position held in stock or FX trading by an offsetting buy or sell trade. In general, closing out means taking profit or cutting losses, but it is also used when all holdings are settled before holiday seasons when the market does not move, such as Golden Week, the summer holidays and Christmas, in order to avoid unrealised losses from sudden price movements. For this reason, stock prices and exchange rates are often seen to fall before long holidays as a result of closing out.
  • Closing Price
    • The closing price is the price at which the last trade occurs at the end of a day's trading in stocks, FX and the like. It is also called the "close".
  • CME
    • CME is the abbreviation of the "Chicago Mercantile Exchange", North America's largest exchange for financial products and derivatives, located in Chicago, Illinois, United States, and owned and operated by CME Group.
  • Consumer Confidence Index
    • The Consumer Confidence Index is an economic indicator of consumer sentiment compiled by the Conference Board, a private economic research organisation in the United States. A similar indicator is the "University of Michigan Consumer Sentiment Index" by the University of Michigan's Survey Research Center, which is used as a leading indicator.
  • Consumer Price Index
    • The Consumer Price Index is an economic indicator showing changes in the prices of goods and services purchased by consumer households within a country. It is also called the "CPI (Consumer Price Index)" or the "core".
  • Contrarian Trading
    • Contrarian trading means trading in stocks or FX in the opposite direction to the market trend.
  • Coordinated Intervention
    • Coordinated intervention is currency intervention carried out jointly by several countries to prevent sharp swings in exchange rates from disrupting the global economy. For currency intervention itself, please see the explanation of that term. Compared with intervention by a single country, coordinated intervention is dramatically more effective at stabilising the exchange rate. Representative examples of coordinated intervention include the coordinated dollar-selling intervention carried out after the Plaza Accord in 1985, and the coordinated dollar-buying intervention after the Louvre Accord in 1987.
  • Correction Phase
    • A correction phase describes a state in which a price that had been continuing to rise or fall slows down and moves sideways. The expression is used not only in FX trading but widely in financial trading, including stocks. It likens a stalled price chart to the landing of a staircase, and is also called a "plateau". A plateau is likely to occur when an uptrend or downtrend has continued for a long time or when the market has moved sharply. During a plateau, the exchange rate lacks a sense of direction and often moves up and down within a very narrow range, so profits can be earned consistently by repeatedly trading at the top and bottom of the range.
  • Cost
    • Cost refers to the average acquisition price (holding price) of the positions you hold. A good holding price is important not only because it is directly linked to profit, but also because it lets you conduct your trading as a whole more advantageously, for example by not being shaken out by a small dip.
  • Country Risk
    • Country risk is the risk that the exchange rate of a country's own currency will fall. It is expressed as a measure of the creditworthiness of the country being invested in. It is also called "sovereign risk".
  • Covert Intervention
    • Covert intervention means that, when financial authorities (the government or central bank) intervene in the foreign exchange market, they do so secretly without announcing that they are intervening. It is slang commonly used by market participants and is also called stealth intervention; however, because intervention is normally carried out without being made public, generally only the term "intervention" is used, and the record of interventions can be found in the "Foreign Exchange Intervention Operations" report published by the Ministry of Finance at the end of each month. Types of intervention include "coordinated intervention", in which several countries intervene simultaneously, and "verbal intervention", which refers to statements by senior government officials aimed solely at an announcement effect, without any market transactions by the financial authorities. Because intervention is sometimes used to adjust the domestic currency and steer it in a direction favourable to the domestic economy, excessive intervention by financial authorities is sometimes criticised at home and abroad.
  • CPI
    • The CPI (Consumer Price Index) is an economic indicator showing changes in the prices of goods and services purchased by consumer households within a country; it is also called the "consumer price index".
  • Cross Trading
    • Cross trading is foreign exchange trading that does not go through the US dollar. For EUR/JPY, it is called a "yen cross" after the currency on the right-hand side.
  • Currency Futures Trading
    • Currency futures trading is a transaction in which it is agreed now to buy or sell a currency listed on an exchange at a set price at a set time in the future. Trading on the International Monetary Market (IMM) within the Chicago Mercantile Exchange (CME) is well known, where contracts are traded that settle on the third Wednesday of each contract month: March, June, September and December. Futures trades are settled by cash settlement, in which only the difference in the trading amounts is exchanged, without delivery of the physical asset (currency, stocks, bonds, etc.).
  • Currency Intervention
    • Currency intervention is the buying and selling of foreign currencies in the market by a monetary authority such as a central bank, with the aim of curbing and stabilising sharp fluctuations in the exchange rate of the domestic currency in the foreign exchange market.
  • Currency Options
    • A currency option is the right to buy or sell a specific currency at a set price within a predetermined period or on a predetermined date. It is also called a "currency option" contract. The right to buy is called a "call option" and the right to sell is called a "put option". Because currency option trading is a contract to buy and sell "the right to buy or sell a currency", no physical currency is actually delivered; the buyer of the option decides whether to actually exercise the option right, while the seller of the option is obliged to comply when the buyer exercises the right.
  • Current Account
    • The current account is the part of a country's balance of payments, excluding financial-asset transactions, that totals the balance of transactions in goods and services.
  • Cutting Losses
    • A closing trade that locks in a valuation loss (unrealised loss) as a realised loss. Conversely, a closing trade that locks in a valuation gain (unrealised profit) as a realised profit is called "profit-taking".
  • Davos Meeting
    • The Davos Meeting is the annual meeting of the World Economic Forum, hosted by the Forum every January in Davos, a resort town in Switzerland.
  • Day Trading
    • Day trading is a trading method in which a position opened today is closed within the same day rather than carried over to the next day. In contrast, the trading method of carrying over the settlement of a position opened today to the next day or later is called "overnight trading". Because day trading makes it possible to earn profit by repeatedly buying and selling during a single day's trading hours, it is a popular trading style, mainly among professional traders.
  • Daylight Saving Time
    • In Europe and the United States, a system of moving clocks forward by one hour is in place every year from April to October in order to make effective use of the long hours of summer daylight. This is called daylight saving time (summer time). On the other hand, the time applied from November to March, when daylight saving time is not in effect, is called winter time.
  • Dead Cross
    • A dead cross is a technical analysis indicator using two moving averages and is used as a sell signal. It can be applied widely to stocks, FX and more. However, because the dead cross is an easily anticipated signal, there may be "false signals" in which the exchange rate does not actually fall. The key is to improve accuracy by combining the dead cross with other analytical indicators. On the other hand, the buy signal using moving averages is called a golden cross.
  • Delegated Intervention
    • Delegated intervention is a type of monetary policy in which, when an imbalance in the exchange rate is harming the domestic economy, a country's monetary authority entrusts a foreign monetary authority with carrying out currency intervention. If the exchange rate of the domestic currency becomes imbalanced during hours when overseas markets are at the centre of trading, it may become necessary to entrust currency intervention to a foreign monetary authority.
  • Dollar Bear
    • Dollar bear is a term for a bearish view of US dollar price movements; it is also called a "US dollar bear". Dollar bear is normally used when the US dollar is expected to fall in the future; conversely, a bullish view of the US dollar is called a "dollar bull".
  • Dollar Bull
    • Dollar bull is a term for a bullish view of US dollar price movements; it is also called a "US dollar bull". Dollar bull is normally used when the US dollar is expected to rise in the future; conversely, a bearish view of the US dollar is called a "dollar bear".
  • Dollar Peg
    • A dollar peg is a fixed exchange rate system that links the rate of a country's currency to the US dollar; it is mainly adopted by countries with weak economic foundations or political instability. Economic weakness and political turmoil cause unstable movements in the value of a country's currency. To avoid this risk and stabilise the currency, central banks and governments in developing countries and elsewhere carry out currency intervention to keep the rate against the US dollar, the key currency, within a certain band. A dollar peg has the advantages of reducing exchange-rate risk by linking the exchange rate to the US dollar and of stabilising the profitability of trade with the United States. On the other hand, because the country is strongly affected by US interest-rate policy, a currency crisis may develop if the exchange rate diverges from the country's own economic situation.
  • Dollar-Cost Averaging
    • Dollar-cost averaging is an investment method that lowers the average investment cost over the medium to long term by investing a fixed amount at regular intervals in an asset whose price fluctuates; it is a strategy mainly used for stocks, bonds, investment trusts, defined-contribution pensions and the like.
  • Done
    • Done is a market term meaning that a trade has been concluded; it is commonly used particularly among the dealers and brokers who intermediate trades at exchanges and financial institutions. On the other hand, when a trade between dealers is not concluded, it is called "Nothing Done".
  • Dovish
    • Dovish refers to a cautious, bearish stance on the economic situation, or to a person or group taking such a stance; it was originally a political term for a person or group with moderate political convictions. It is generally used for statements by central banks and key government officials, and applies to statements that include "opposition to rate hikes", "a cautious economic outlook" or "support for monetary easing". Conversely, a bullish stance on the economic situation is called "hawkish".
  • Dow Jones Industrial Average
    • The Dow Jones Industrial Average is a stock index calculated and published by S&P Dow Jones Indices in the United States. It is sometimes abbreviated as the "Dow average" or the "NY Dow". It is an index of 30 selected blue-chip stocks representative of the United States, and changes to the list of 30 stocks are discussed and decided by an index committee made up of representatives of Dow Jones and The Wall Street Journal.
  • EBS
    • EBS is an electronic brokering (intermediation) system: a trade intermediation method that allows foreign exchange orders to be placed directly from terminals installed at banks, securities firms and the like, without relying on voice brokers (people).
  • ECB
    • The ECB (European Central Bank) is the central bank that conducts monetary policy for the euro, the single European currency.
  • ECB Governing Council
    • The ECB Governing Council is the highest decision-making body of the ECB (European Central Bank), which is responsible for monetary policy for the euro, the single European currency; the ECB Governing Council meets twice a month, on the first and third Thursdays.
  • ECN Method
    • The ECN method is an order-processing method named after the initials of the three words "Electronic Communications Network". Together with the STP (Straight Through Processing) method, it is commonly used by FX brokers.
  • Economic Growth Rate
    • The economic growth rate is the degree to which a country's economy grows over a certain period (a quarter, a year, etc.). The main measures used to show the economic growth rate are the rates of change in gross national product (GNP) and gross domestic product (GDP).
  • Effective Margin
    • Effective margin is the account balance of a trading account plus or minus the valuation gains or losses on positions currently held. When an unrealised profit (profit not yet locked in) arises on a position held because of exchange-rate movements, effective margin increases; when an unrealised loss (loss not yet locked in) arises, effective margin decreases.
  • Either Way
    • Either Way refers to a situation in the foreign exchange market in which the selling price (Ask) and the buying price (Bid) are the same.
  • EPA
    • EPA is the abbreviation of "Economic Partnership Agreement". It is a comprehensive agreement concluded between two or more countries or regions that covers, in addition to the content of a free trade agreement (FTA), areas other than trade.
  • EU
    • The European Union (EU) is a union of states in Europe, headquartered in Brussels, the capital of Belgium.
  • European Central Bank
    • The European Central Bank is the central bank that conducts monetary policy for the euro, the single European currency. Its official name is the "ECB (European Central Bank)". The ECB was established in 1998, ahead of the launch of the euro in 1999, as a new institution to carry out euro-related operations and monetary policy. It is headquartered in Frankfurt, Germany. In other countries there is one central bank per country to manage monetary policy for the national currency, but because the euro is used by many EU member states, the ECB is positioned as the central bank for the entire euro area. The ECB's top priority is price stability within the euro area. Besides this, it issues and manages the euro, conducts open market operations, holds the official foreign reserves of euro member states and adjusts the official discount rate. The ECB Governing Council meets on the first and third Thursday of every month to decide on monetary policy. Although the euro boasts a circulation comparable to the dollar and the yen, the fact that member states have no discretion over monetary policy and that strict fiscal discipline rules are imposed on them is often a source of dissatisfaction and criticism.
  • European Commission
    • The European Commission serves as the executive body of the European Union (EU). Specifically, it submits policy proposals and draft legislation to the Council of the European Union, supervises the application of EU law and implements Council decisions. The European Commission consists of 28 members in total, one chosen from each EU member state. Commissioners serve five-year terms and, in carrying out their duties, are required to act solely in the interests of the EU without being influenced by the wishes of their home governments. The European Commission has its main offices in Brussels and Luxembourg, where around 20,000 staff work.
  • Exchange Rate
    • The exchange rate is the rate at which two currencies are exchanged in foreign exchange trading (FX trading). It is also called the "currency rate".
  • Execution
    • Execution is a word meaning that a trade has been concluded in FX trading, stock trading and the like; the date on which a trade is concluded is called the "trade date", and the price at which it is concluded is called the "execution price".
  • Exotic Currencies
    • Exotic currencies are minor currencies, particularly those issued by developing and emerging countries.
      Examples of exotic currencies include the Turkish lira, South African rand, Mexican peso, Hong Kong dollar, Singapore dollar and Norwegian krone. Compared with major currencies such as the US dollar, Japanese yen, euro and British pound, these currencies have smaller circulation and trading volumes and tend to move sharply, so their swap points are set high.
  • Fed Watcher
    • A specialist who observes and analyses all the moves of the US FRB, centred on its monetary policy and including personnel matters. Fed watchers belong to news organisations, financial institutions, research firms and the like, and their reports explain detailed information such as the process and timing of the FRB's decision-making.
  • Federal Open Market Committee
    • The Federal Open Market Committee is the meeting that discusses and decides US monetary policy; in English it is called the "FOMC (Federal Open Market Committee)".
  • FF Rate
    • The FF rate (Federal Funds Rate) is the interest rate applied when US private banks raise funds in the short-term money market; it is the representative indicator of US short-term interest rates and is the operating target of the monetary policy of the Federal Reserve Board (FRB).
  • Floating Exchange Rate System
    • The floating exchange rate system lets exchange rates be determined freely by the supply and demand for foreign currencies in the foreign exchange market; it has been used from 1973 to the present, replacing the fixed exchange rate system that began in 1944. The collapse of the fixed exchange rate system began when US President Nixon declared the suspension of the convertibility of the dollar into gold on 15 August 1971, in order to prevent the outflow of the country's gold holdings.
  • FOMC
    • The FOMC (Federal Open Market Committee) is the meeting that discusses and decides US monetary policy.
  • Foreign Bonds
    • Foreign bonds are bonds of which the issuer, the currency of issue or the place of issue is foreign. They are also simply called "foreign debt".
  • Foreign Exchange
    • Foreign exchange is the exchange of two different currencies. It is also called "foreign exchange trading". In English it is called "Foreign Exchange" or "Forex", and it is often referred to by its initials as "FX" or "FX trading".
  • Foreign Exchange Reserves
    • Foreign exchange reserves are the foreign currencies held by a country's financial authorities.
  • Four Prices (OHLC)
    • The collective term for the opening price, closing price, high and low.
  • FRB
    • The FRB (Federal Reserve Board) is the body that corresponds to the central bank of the United States.
  • Free Margin
    • Free margin is the part of the trading account balance (margin) that can be used for new trades. Free margin can be calculated with the formula "effective margin - required margin".
  • FTA
    • FTA is the abbreviation of "Free Trade Agreement".
  • Fund Manager
    • A fund manager is a specialist in managing financial assets who works for an asset manager or financial institution, such as an investment trust company, investment advisory firm, trust bank or insurance company, and actually invests the funds collected from investors. In general, asset managers and financial institutions have analysts and economists on staff, and fund managers make investment decisions and manage funds based on the information and analysis they provide.
  • Fundamental Analysis
    • Data and indicators representing the economic condition of a country or company are called "fundamentals": the economic growth rate, unemployment rate and inflation rate are a country's fundamentals, while sales, profit margin and net profit or loss are a company's fundamentals. The method of forecasting trends in exchange rates based on changes in these fundamentals is called fundamental analysis.
  • G20
    • The G7 (meeting of finance ministers and central bank governors of seven developed countries: Japan, the United States, Germany, the United Kingdom, France, Italy and Canada) was originally created as a forum for consultation among developed countries. In recent years it has begun to change into a forum for dialogue between developed and emerging countries.
  • G7
    • The meeting of finance ministers and central bank governors of seven countries. The seven countries (Group of Seven) are the United States, Japan, Germany, the United Kingdom, France, Italy and Canada. Before Italy and Canada joined, it was the G5, with five participating countries: the United States, Japan, the United Kingdom, France and West Germany. In 1975 Italy joined and the first summit of developed countries was held as the G6; Canada then joined in 1976 and the second summit was held. Russia later began to take part, and from 1998 it became the G8 (it has now returned to the G7 following the suspension of Russia's membership). In principle, the "G7" meets three times a year.
  • Gap
    • A "gap" (window) is a gap that appears between candlesticks on a candlestick chart in FX or stock trading because the price has jumped; the occurrence of such a gap is described as "a gap opening".
  • Gap Fill
    • A "gap fill" is a movement in which, after a price gap called a "window" appears on an FX or stock candlestick chart, the market reverses and closes that price difference. The length of time until the gap is filled varies, but basically it is thought that an open gap will be filled, and this is often used as a trading strategy.
  • GDP
    • GDP (Gross Domestic Product) is the total value added of goods and services produced within a country over a certain period.
  • GNP
    • GNP (Gross National Product) is the total value added of goods and services newly produced by individuals and companies resident in a country over a certain period.
  • Golden Cross
    • A golden cross is a technical analysis indicator using two moving averages and is used as a buy signal. It can be applied widely to stocks, FX and more. On the other hand, the sell signal using moving averages is called a dead cross.
  • GTC
    • An order that remains valid indefinitely until a trade is concluded. It remains valid until the order is executed or you cancel it yourself.
  • Hawkish
    • Hawkish refers to an optimistic, bullish stance on the economic situation, or to a person or group taking such a stance. It was originally a political term for a person or group with hard-line political convictions. It is generally used for statements by central banks and key government officials, and applies to statements that include "support for rate hikes", "a bullish economic outlook" or "acceptance of monetary tightening". Conversely, a bearish stance on the economic situation is called "dovish".
  • Hedge Fund
    • A hedge fund is a speculative fund that pursues returns while hedging (avoiding) risk by making full use of a variety of trading methods.
  • Hedged Positions (Two-Way Positions)
    • Holding hedged positions means holding both "buy" and "sell" positions in the same instrument or currency pair; because FX trading and CFD trading allow you to start trading with a sell order, hedged positions are possible. Hedged positions are not possible in cash trading of stocks or bonds.
  • HICP
    • The HICP (Harmonised Index of Consumer Prices) is an indicator calculated by Eurostat, the statistical office of the European Union, by combining the consumer price indices of the EU member states; it is the EU's consumer price index (CPI). Whereas a CPI shows the price level of a single country such as Japan or the United States, the HICP is made up of the CPIs of the EU member states.
  • High
    • The high is the highest price among trades over a certain period in the stock market or FX market; the high is often used as a reference when placing orders in FX trading. On the other hand, the lowest price among trades over a certain period is called the low.
  • Historical Rollover
    • A historical rollover is a form of rollover in which the holding date of a position is extended using the rate at which it was originally executed; it is also called a "historical rate rollover".
  • Holdings
    • Holdings are the quantity of foreign currency or stocks held unsettled after placing a buy or sell order; they are commonly called a "position".
  • Ichimoku Kinko Hyo
    • Ichimoku Kinko Hyo is a technical indicator of Japanese origin. It was originally developed for stock charts based on daily candlesticks. It consists of the leading spans, the lagging span, the cloud and other components, and is said to be an indicator that lets you see the future.
  • IFD Order
    • An IFD order is an order method in which two orders are set and placed together: a new entry order and an order to close that position. It is written "IFD", the abbreviation of the English "If Done", and is also sometimes called an "If-Done order". A new order can of course be combined with a take-profit order, and it can also be combined with a stop-loss order.
  • Ifo Business Climate Index
    • The Ifo Business Climate Index is an economic indicator calculated from a survey of German companies; it is surveyed and published by the German economic research institute "Information and Forschung (Ifo)".
  • IFO Order
    • An IFO order is an order method in which three orders are placed at the same time: a new entry order, a take-profit order for that position and a stop-loss order. Because it combines the characteristics of an IFD order and an OCO order, it is also sometimes called an "IFDOCO order".
  • IMF
    • The IMF (International Monetary Fund) is a specialised agency of the United Nations established after the Second World War with the aim of stabilising international finance and foreign exchange rates.
  • Income Gain
    • Income gain is the income obtained by continuing to hold financial products such as stocks or foreign currencies. In FX trading, profit from swap points is an income gain; because it comes in regularly like interest on a bank deposit, it can be said to have the advantage of encouraging investors to take a long-term view.
  • Index of Business Conditions
    • The Index of Business Conditions is an economic indicator published monthly by the Cabinet Office of Japan that comprehensively shows trends in Japan's economy. It is calculated by combining indicators that respond sensitively to the economy, such as production, investment, employment and prices.
  • Instant Execution
    • Instant execution is a type of the "STP method (short for Straight Through Processing)". It is called "Instant Execution" in English.
  • Institutional Investors
    • Institutional investors are companies and organisations, distinct from individual investors, that use large funds collected from customers or members to invest in stocks, bonds, FX, commodity futures and the like. They are also called funds.
  • Interbank Market
    • The interbank market is the market for transactions between banks, in which banks around the world trade foreign currencies, bills and funds with each other 24 hours a day by telephone and internet. Tokyo, London and New York are called the world's three major markets.
      Originally, as the name suggests, only banks were allowed to participate, but as financial liberalisation progressed and regulations were relaxed in the 1990s, not only banks but also institutional investors such as insurance companies, securities firms and funds, and even large professional traders, became able to participate.
      Under the STP (Straight Through Processing) and ECN (Electronic Communications Network) methods offered by overseas FX brokers, retail investors' orders are ultimately routed to this interbank market.
  • International Monetary Fund
    • A fixed exchange rate system is a system that fixes the price of an exchange rate at a certain value or restricts fluctuations in the rate. In 1944 the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development were established, the exchange rate between gold and the US dollar was fixed (1 ounce of gold = 35 dollars), and it was laid down that the US dollar could always be exchanged for gold. This marked the beginning of the IMF system, with the US dollar as the key currency.
  • Inverted Yield Curve
    • An inverted yield curve is a situation in the bond market in which the yield on bonds with a short time to maturity exceeds the yield on bonds with a long maturity. In other words, it refers to the phenomenon of short-term interest rates being higher than long-term interest rates.
  • ISM Manufacturing Index
    • The ISM Manufacturing Index is an economic indicator of business sentiment based on a survey of purchasing executives at manufacturing companies in the United States, published by the Institute for Supply Management (ISM). It is a key indicator for US manufacturing, and about 350 companies take part in the survey.
  • ISM Non-Manufacturing Index
    • The ISM Non-Manufacturing Index is an economic indicator of business sentiment based on a survey of purchasing executives at non-manufacturing companies in the United States, published by the Institute for Supply Management (ISM).
  • Jackson Hole Symposium
    • The Jackson Hole Symposium is an economic symposium held every August in Jackson Hole, Wyoming, United States. It is hosted by the Federal Reserve Bank of Kansas City, one of the branches of the Federal Reserve (FRB). Central bank governors, politicians, academic economists and economists from around the world take part in this event. Statements made and joint declarations issued at the symposium attract worldwide attention and often have a major impact on the FX and stock markets.
  • Japanese Government Bonds
    • Japanese Government Bonds are bonds issued by the Japanese government according to its fiscal needs, to develop and expand social infrastructure and to make up for revenue shortfalls; they are also called "JGBs (Japanese Government Bonds)".
  • JASDAQ
    • A Japanese stock market operated by the Tokyo Stock Exchange, abbreviated as "JQ"; the name is short for the JASDAQ Securities Exchange. Rather than large companies such as those listed on the First and Second Sections of the TSE, JASDAQ and Mothers mostly list emerging and venture companies.
  • Jobs-to-Applicants Ratio
    • The jobs-to-applicants ratio is calculated by dividing the monthly number of active job openings by the monthly number of active job seekers, based on data on job openings, job seekers and placements at Public Employment Security Offices (Hello Work). In general, the state of the labour market is judged by whether the ratio is greater or less than 1. When the ratio is greater than 1, labour demand is high and it is said to be a "seller's market"; when it is less than 1, labour supply is high and it can be said to be a "buyer's market".
  • Key Currency
    • A key currency is a currency that has strong influence in the global economy and is used as the standard means of payment in imports, exports and international financial transactions.
  • Leave Order
    • A leave order is a buy or sell order placed with a financial institution requesting execution at a specified price; limit orders and stop orders in retail FX trading also fall into this category. In the interbank market, foreign exchange dealers often place leave orders with other banks or overseas branches.
  • Leverage
    • Trading in which the funds deposited are used as collateral to invest an amount larger than the amount deposited is called leveraged trading.
  • Limit Order
    • A limit order is a type of FX order that is placed by specifying the desired trading price in advance. It is also called a "Limit Order". It is the same as a stop order in that a trading price is specified, but it differs from a stop order in that a buy limit order is "an order to enter a buy at a price lower than the current exchange rate", and a sell limit order is "an order to enter a sell at a price higher than the current exchange rate".
  • Liquidity
    • Liquidity refers to the "liquidity" of currencies in the foreign exchange market; in English it is called "Liquidity". A state in which there are many market participants and trading is active is described as "high liquidity"; when liquidity is high, there are ample trade orders, so you can sell a particular currency pair immediately after buying it, or buy it back immediately after selling it.
  • London Fixing
    • The London Fixing is the setting of the spot price of gold at 16:00 London time. In general, the London market is an important market for physical trading in precious metals such as gold, and the gold price set at this time becomes the global benchmark price for gold. Because gold is normally traded in dollars, the London Fixing has a major impact on supply and demand for dollar funds. As a result, exchange rates (especially the dollar) may move sharply at this time, and FX trading tends to be concentrated around it.
  • Long
    • Long means the state of having bought a foreign currency. It is also called a "long position" or a "buy position". If an investor expects the dollar to rise in the future, they go long on the dollar. When the dollar actually rises and the long position is closed, the difference at that time becomes the profit from the FX trade.
  • Long Position
    • A long position refers to the state of having bought a foreign currency and continuing to hold it for a long period without selling it right away. It is also called a "buy position" or "long".
  • Long-Term Interest Rate
    • The long-term interest rate is the interest rate applied to fund transactions of one year or more. It serves as a benchmark for setting interest rates on personal mortgages and on bank loans to ordinary companies. The "newly issued 10-year government bond yield" is widely used as the representative indicator of long-term interest rates. It is determined by supply and demand in the bond market, one of the long-term money markets: when there are few buyers of 10-year government bonds, bond prices fall and yields rise, while when buyers of 10-year government bonds increase, bond prices rise and yields fall. In general, because long-term interest rates reflect expectations and forecasts of future economic growth and price trends, they are said to be a thermometer of the national economy. Changes in the yield on US 10-year Treasuries in particular have a major impact on the FX market.
  • Long-Term Money Market
    • The long-term money market is the market in which funds are traded with maturities of one year or more. In contrast, the market in which funds are provided for periods of less than one year is called the short-term money market. There are two long-term money markets: the bond market, in which public and corporate bonds are traded, and the stock market, in which shares are traded. The "newly issued 10-year government bond yield", the interest rate on newly issued 10-year government bonds traded in the bond market, is used as the benchmark indicator for long-term interest rates.
  • Loss Cut
    • A loss cut is a function that forcibly executes a stop-loss order when the valuation loss on positions held reaches a certain level; FX brokers generally use the margin maintenance ratio as the measure for triggering a loss cut. The margin maintenance ratio percentage that triggers a loss cut differs from one FX broker to another.
  • Lot
    • A lot is the unit expressing the amount of currency in a single FX order, written as "Lot". Many brokers set 1 lot = 100,000 currency units.
  • Low
    • The low is the lowest price among trades over a certain period in the stock market or FX market.
  • Major Currencies
    • Major currencies are currencies with relatively large trading volumes and many market participants in the foreign exchange market. They include the US dollar, Japanese yen, euro, pound, Swiss franc and Canadian dollar.
  • Margin
    • Margin is the funds deposited as collateral when trading with leverage in FX trading and the like.
  • Margin Call
    • A margin call is a state in FX trading, CFD trading, futures trading and the like in which, when valuation losses have grown due to market movements and the collateral capacity of the margin has decreased, additional margin must be deposited to maintain the positions held.
  • Margin Maintenance Ratio
    • The margin maintenance ratio is the ratio of margin to the orders currently being traded. When trading with leverage, your own funds deposited in the trading account serve as collateral. When this figure falls, additional margin and the like will arise.
  • Mark-to-Market
    • Mark-to-market means calculating the profit or loss (revaluing) the value of positions held at each day's market price in margin trading, futures trading, option trading and the like. The Japanese term derives from "washing the original price again (resetting it) at the market price"; in exchange trading such as on futures exchanges, unsettled positions (open interest) are re-marked to market every day and their unrealised gains and losses re-evaluated for risk management purposes.
  • Market Execution
    • With market execution, investors' orders are passed directly to the covering financial institution. It has the advantage that no requotes are issued by the overseas FX broker and investors' orders are always executed. However, slippage may occur before the covering financial institution processes the order in the interbank market, so the execution price may differ from the order price.
  • Market Interest Rate
    • The market interest rate is the interest rate applied when financial institutions other than the central bank lend and borrow money among themselves in the financial markets. It is also sometimes called the "prevailing interest rate".
  • Market Order
    • A market order is an order method that specifies only the instrument and the trading volume, without specifying a trading price; it is also called a "Market Order". Unlike limit orders and stop orders, there is no need to wait until the desired price is reached: the defining feature of a market order is that it is executed immediately once placed.
  • Middle Rate
    • The middle rate is the exchange rate that banks and other financial institutions use as the reference when exchanging foreign currency; in English it is called the "TTM (Telegraphic Transfer Middle rate)".
  • Minor Currencies
    • Minor currencies are currencies that are traded in limited regions and have relatively small trading volumes in the market. Representative minor currencies include the Australian dollar, New Zealand dollar, Turkish lira, South African rand and Mexican peso.
  • Monetary Policy
    • Monetary policy is economic policy implemented by a central bank for the growth of the national economy and domestic price stability.
  • Monetary Policy Meeting
    • The Monetary Policy Meeting is a meeting held regularly by the Bank of Japan to discuss and decide on matters relating to domestic monetary policy. It decides on matters such as market interest rates and the money supply through open market operations, and the reserve requirement ratio of commercial banks' deposits with the Bank of Japan.
  • Moving Average
    • A moving average is a line drawn on a chart by averaging closing prices over a certain past period and connecting those values. Moving averages are used in many forms of technical analysis and are valuable for understanding trends in the currency market.
      The period over which closing prices are averaged can be changed: commonly used periods are 5, 25 and 75 days on daily charts, 13, 26 and 52 weeks on weekly charts, and 12, 24 and 60 months on monthly charts. Periods based on the Fibonacci sequence, such as 7, 13, 23 and 53 days, are also sometimes used.
  • MPC
    • The MPC (Monetary Policy Committee) is a committee established at the Bank of England (BOE) that discusses the bank's monetary policy.
  • NAHB Housing Market Index
    • The NAHB Housing Market Index is an indicator of business sentiment among US real estate businesses, published monthly by the NAHB (National Association of Home Builders). It is calculated by compiling a survey of NAHB member home builders on home sales trends over the next six months, with 50 as the dividing line: a reading above 50 indicates that the market is viewed positively, and a reading below 50 indicates a pessimistic outlook. Together with the Case-Shiller Home Price Index, it is an important economic indicator for the real estate market.
  • NASDAQ
    • NASDAQ is one of the world's leading exchange operators (NASDAQ Inc.), headquartered in New York. The name may also refer to the stock exchange it operates, the "NASDAQ Stock Market". The name NASDAQ is short for "National Association of Securities Dealers Automated Quotations".
  • NASDAQ Composite Index
    • The NASDAQ Composite Index is a market-capitalisation-weighted index made up of all stocks (more than 3,000) listed on NASDAQ, the US electronic stock market.
  • Negative Spread
    • A negative spread refers to a state in which the value of an asset held, such as stocks or foreign currency, has fallen below its value at the time of acquisition because of price movements, so that a loss has arisen. It is also called an "unrealised loss". The term "negative spread" is also sometimes used with other meanings. Conversely, the state in which the value of an asset held has risen above its value at the time of acquisition because of price movements is called a "profit margin".
  • Netting
    • Netting means offsetting the balances of receivables and payables arising from each transaction against each other on a set date in margin trading, derivatives trading and the like, and settling only the difference. It is also called "cash settlement" and is also used in FX trading.
  • New York Close
    • The New York Close is 17:00 US Eastern Time (7:00 a.m. the next day, Japan time), which marks the end of the day in FX trading; at this time the New York market finishes its day's trading.
  • New York Fed Manufacturing Index
    • The New York Fed Manufacturing Index is an indicator of business conditions in manufacturing in New York State, published in the middle of every month by the Federal Reserve Bank of New York, one of the 12 regional Federal Reserve Banks in the United States.
  • Nikkei 225 Futures
    • Nikkei 225 futures trading is a stock index futures product whose underlying asset is the Nikkei Stock Average; it is also called "Nikkei 225 futures". It is a futures contract to buy or sell a fixed quantity of the Nikkei Stock Average at a predetermined price on a predetermined date (the expiry date). In Japan it is listed on the Osaka Exchange, and outside Japan it can be traded on the Chicago Mercantile Exchange and the Singapore Exchange.
  • Nikkei Stock Average
    • The Nikkei Stock Average is an average stock price index calculated from 225 stocks selected as representative of the Japanese stock market from among the stocks listed on the First Section of the Tokyo Stock Exchange; it is also called the "Nikkei 225" or the "Nikkei average".
  • Nominal Interest Rate
    • The nominal interest rate is the face-value interest rate that does not take into account the rate of price increases (the inflation rate); specifically, it is the interest rate seen in everyday life.
  • Nothing Done
    • Nothing Done is a market term meaning that a trade has not been concluded.
  • OCO Order
    • An OCO order is an order method in which two orders are placed and, when one of them is executed, the other is automatically cancelled. The three letters OCO stand for "One side done then Cancel the Other order".
  • Offshore Transactions
    • Offshore transactions are financial transactions in which both investment and fund-raising are carried out with non-residents, such as lending funds raised from one non-resident (a foreigner) to another non-resident. The word "offshore" in the term means "away from the shore", and here it is used in the sense of "away from the domestic market".
  • Oil Money
    • "Oil money" is the collective term for the sovereign wealth funds of oil-producing countries, represented mainly by Saudi Arabia and other Middle Eastern countries, that are invested using the profits earned from oil exports.
  • OPEC Meeting
    • The OPEC Meeting is held regularly four times a year (March, June, September and December), and also extraordinarily as needed; its main agenda item is the crude oil production quotas of OPEC member countries other than Iraq.
  • Open Interest
    • Open interest refers to positions that have not yet been settled in margin trading, option trading, futures trading, FX trading and the like.
  • Opening
    • The opening refers to the first trade concluded on a stock exchange on a given day. It can also mean the time at which trading on the stock exchange begins. In general, the trading price at the opening is determined by a call auction, based on the principle of price priority, treating all orders as having been placed at the same time.
  • Opening Price
    • The opening price is the first price that occurs after the start of a day's trading in stock or FX trading.
  • Option Trading
    • An option is the "right" to buy or sell a financial product (such as stocks or gold) on a fixed future date at a price determined in advance. The right to buy is called a "call option" and the right to sell is called a "put option".
  • Order
    • An order refers to a buy or sell instruction in FX trading. A buy instruction is sometimes called a "buy order" and a sell instruction a "sell order".
  • Oscillators and Trend Indicators
    • Technical analysis includes oscillator-type and trend-type methods.
      Indicators used in oscillator-type technical analysis include RSI, RCI and Stochastics. Rather than judging whether a rate is at an appropriate level, these indicators are used to read the tendency they show of being "overbought or oversold", and positions are opened at the moment the market moves out of that imbalance.
      There are several trend-type technical analysis methods, such as moving averages, Bollinger Bands, MACD and Ichimoku Kinko Hyo. What these methods have in common is that they measure the "trend" and use it as a signal to predict its reversal and trade against it, in what is called "counter-trading".
      On the other hand, there are also "trend-following" investors who trade with the trend as if chasing it, so the timing for reading the trend and opening positions differs from investor to investor.
  • OTC Trading
    • OTC trading is trading in which a seller and a buyer deal one-to-one without going through a securities exchange or similar venue, agreeing on price, quantity and so on; the name comes from the initials of "Over The Counter". It is also called "over-the-counter trading" or "bilateral trading".
  • Outright
    • An outright is a one-directional buy or sell transaction in foreign exchange, made without any condition to buy back or sell back.
      It is sometimes also called an "outright transaction". Outright transactions take place in the interbank market and are not offered in FX trading for retail investors. In retail FX, buy and sell positions must eventually be closed, whereas outright transactions carry no such premise of settlement.
  • Overnight Trading
    • Overnight trading means not closing a position opened today on the same day, but continuing to hold it into the next day or beyond. When a position is held into the following week or later, this is sometimes described as holding over the weekend.
  • Overshoot
    • An overshoot refers to an exchange rate making a sharp move in one direction over a short period. Both a momentary rise and a momentary fall in price count as an overshoot.
  • Panic Selling
    • Panic selling means selling a buy position to cut losses, knowing that a loss will result; it is a term used across markets in general, including stock trading and FX trading.
  • Philadelphia Fed Manufacturing Index
    • The Philadelphia Fed Manufacturing Index is an economic indicator published by the Federal Reserve Bank of Philadelphia in the United States, showing economic activity and business conditions in manufacturing in the Philadelphia district. The Philadelphia district includes Pennsylvania, New Jersey and Delaware. The indicator is calculated by compiling a survey in which 11 items, such as the number of employees, new orders, average wages and the unemployment rate, are compared with the previous month, and current conditions and expectations for six months ahead are answered with one of three choices: "better, same or worse". Zero is the dividing line: a positive index indicates good business conditions, while a negative index indicates that business conditions are deteriorating.
  • Physical Delivery (Receipt and Delivery)
    • Physical receipt means that, instead of closing a buy position held in FX trading by cash settlement (an offsetting trade), you pay the consideration and receive the foreign currency as it is. Physical delivery, on the other hand, refers to a transaction in which, for a sell position held, you pay the foreign currency to the counterparty and receive the consideration.
  • Pivot Point
    • A pivot point is an analytical method that calculates price levels likely to act as today's support or resistance from three prices of the previous day (or previous week or month): the high, the low and the close. It was devised by J. W. Wilder Jr., who is famous for developing technical analysis methods such as RSI. Indicators such as moving averages had the drawback that the results of analysis change depending on the parameter values entered and the range of data, whereas pivot points use the past high, low and close, which are already fixed, and are valued for their lack of arbitrariness, always producing the same result.
  • Plateau
    • A plateau describes a state in which a price that had been continuing to rise or fall slows down and moves sideways. It is also described as "building up strength" or as a range.
  • Plaza Accord
    • The Plaza Accord is the agreement on stabilising exchange rates concluded at the G5 (meeting of finance ministers and central bank governors of five developed countries) held at the Plaza Hotel in New York on 22 September 1985.
  • PMI
    • The PMI (Purchasing Managers' Index) is an index calculated by surveying and interviewing purchasing managers in manufacturing and services about new orders, output, order backlogs, prices, employment, purchase quantities and so on, and applying fixed weights to the collected data; it is also called the "purchasing managers' index".
  • Policy Interest Rate
    • The policy interest rate is the interest rate a central bank applies when lending to commercial banks (ordinary banks). It is set through the central bank's monetary policy.
  • Portfolio
    • "Portfolio" is a word used in everyday life for things such as "a collection of an artist's or individual's works" or "a document case", but in the investment and financial industry it means "a list of the assets and instruments currently invested in".
  • Position
    • A position is the state of what buy or sell orders an investor has in FX trading, stock trading and the like. It is also called "open interest" or "holdings".
  • Position Adjustment
    • Position adjustment means closing positions held in order to change the allocation of invested funds or to reduce the investment risk being carried.
  • Position Taker
    • A position taker is a market participant who relies on their own view of the market, takes on risk themselves by opening positions, and aims to earn profits from speculation; the term is used not only in the FX market but across markets as a whole.
  • PPI
    • The PPI (Producer Price Index) is an indicator showing changes in the prices at which producers supply the goods and services they produce; it is also called the "wholesale price index". In contrast, the index showing changes in the prices at which consumers buy goods and services is the CPI (Consumer Price Index).
  • Profit Margin
    • A profit margin refers to a state in which the value of an asset held, such as stocks or foreign currency, has risen above its value at the time of acquisition because of price movements, so that a profit has arisen; it is also called an "unrealised profit". Conversely, the state in which the value of an asset held has fallen below its value at the time of acquisition because of price movements is called a "negative spread".
  • Purchasing Power Parity Theory
    • The Purchasing Power Parity (PPP) theory is one of the ideas explaining what determines foreign exchange rates. It holds that exchange rates are determined by the ratio of the purchasing power of the domestic currency to that of the foreign currency. It was presented in 1921 by the Swedish economist Gustav Cassel as "the purchasing power parity theory of foreign exchange".
  • Quantitative Easing
    • Quantitative Easing (QE) refers to a central bank conducting monetary policy with a target for the amount of money it supplies to the market.
  • Quotes
    • Quotes are the trading prices desired by sellers and buyers respectively in a market for stocks, FX and the like. The Bid and the Ask are displayed.
  • Range Market
    • A range market describes a state in which a price that had been continuing to rise or fall slows down and moves sideways; the term is used not only in FX trading but widely in financial trading, including stocks. It likens a stalled price chart to the landing of a staircase, and is also called a "correction phase" or a "plateau".
  • RBA
    • The RBA is the central bank of the Commonwealth of Australia; its official name is the "Reserve Bank of Australia".
  • Real Interest Rate
    • The real interest rate is the nominal interest rate discounted by the rate of inflation.
  • Real-Demand Participants
    • Real-demand participants are market participants in the foreign exchange market, commodity markets and the like who trade for the purposes of day-to-day economic and business activities.
  • Realised Profit
    • A realised profit is a profit locked in by placing a closing order on an unrealised profit (valuation gain) that has arisen in stock trading or FX trading. It is also sometimes called a "confirmed profit". In trading financial products, including FX, the value of assets held rises and falls with changes in asset prices (in FX, changes in exchange rates). Therefore, when an unrealised profit (valuation gain) has arisen, the key question is when to take profit and secure a realised profit. On the other hand, a loss locked in by placing a closing order on an unrealised loss (valuation loss) arising in stock trading or FX trading is called a realised loss.
  • Recession
    • In general, economic activity follows a business cycle in which periods of expansion and contraction alternate over cycles of several years, and a state in which the economy is sluggish is called a recession (economic downturn). The definition of a recession differs depending on each country's economic policy, but in Europe and the United States a recession is regarded as "two consecutive quarters of negative GDP growth".
  • Reflation
    • Reflation refers to a state in the business cycle in which the economy has emerged from deflation but has not yet reached inflation.
  • Required Margin
    • Required margin is the amount needed to place a new order in FX trading, and serves as a kind of collateral for trading with leverage.
  • Requote
    • A requote means that an order placed by an investor is rejected by the FX broker; a possible reason for a requote is, for example, a sudden sharp price movement.
  • Resistance Line
    • A resistance line is a price zone at which market participants tend to perceive that "the market will not rise any further"; it is also called a "resistance level". A resistance line can be visualised by connecting price levels near the highs on an exchange-rate chart with a horizontal line; in general, when the exchange rate approaches the resistance line, selling increases and the trend often reverses. Conversely, a price zone at which many market participants tend to perceive that "the market will not fall any further" is called a support line (support level).
  • Risk
    • Risk is a word that generally means "danger, the degree of danger, or the possibility that things will not go as expected"; in asset management and financial trading it refers to "the uncertainty of the profit (return) to be received in the future".
  • Risk Assets
    • Risk assets are assets whose future returns are very difficult to predict, such as stocks, corporate bonds and real estate. They are also called risky assets.
  • Risk-Off
    • Risk-off refers to market conditions in which investors tend to move funds into lower-risk assets; the term is used not only in FX but in investment in general, including stocks, CFDs, bonds and commodities.
  • Risk-On
    • Risk-on refers to market conditions in which it is easy to pursue profit through trading; the term is used not only in FX but in investment in general, including stocks, CFDs, bonds and commodities.
  • Rollover
    • Rollover means carrying a position opened today over to the next business day or later, rather than closing it within the same day. Rollover takes place at 7:00 a.m. Japan time the following day, when New York trading ends, and swap interest arises on positions that remain unsettled at that point.
  • RSI
    • The RSI (Relative Strength Index) is a technical indicator that measures whether upward or downward movements are stronger in the closing prices of an instrument over a certain period.
  • S&P500
    • The S&P500 is a stock index made up of 500 representative stocks listed on US stock exchanges, calculated and published by S&P Dow Jones Indices; it is also called the "S&P 500 Stock Index".
  • Safe Assets
    • Safe assets are assets whose future returns are fixed in advance, such as savings deposits and government bonds. They are also called risk-free assets. Assets with little risk of their principal being eroded by market fluctuations are also included among safe assets; under this definition, highly rated government bonds of developed countries and gold are also safe assets. In contrast to safe assets, assets whose future returns are difficult to predict are called risk assets.
  • Scalping
    • Scalping is a trading style that captures thin margins by repeatedly buying and selling quickly within very short periods, such as seconds or minutes. It is one of the trading styles commonly seen in FX trading. Scalping is said to be a method favoured by professional traders: even if the margin on each trade is small, a substantial profit can be made by repeating dozens of trades in a single day. Even with a price movement of only a few pips, applying high leverage makes it possible to enlarge each position and thereby increase the margin per trade.
  • Sell in May
    • "Sell in May" is one of the anomalies widely known in the market, an investment maxim that originated on Wall Street in New York.
  • Sell on Rallies
    • "Sell on Rallies" means selling at a point when the price has risen from where it was when the forecast was made, or selling at the upper end of the forecast range. In other words, it means selling into a spike, and indicates weaker selling interest than "selling right away".
  • Selling on Rallies
    • In the course of a downtrend in an exchange rate, there are moments when the rate temporarily turns upward; this slight rise is called a "rally" (pullback). Conversely, a moment when the rate falls at regular intervals during an uptrend is called a "dip".
  • Short
    • Short means the state of having sold a foreign currency. It is also called a "short position" or a "sell position".
  • Short Position
    • A short position refers to the state of having sold a foreign currency and keeping it sold for a long period without buying it back right away. It is also called a "sell position" or "short". In FX trading, you can start a trade by selling a foreign currency, using margin as collateral.
      If an investor expects the dollar to fall in the future, they take a short position in dollars. When the dollar actually falls and the short position is closed, the difference at that time becomes the profit from the FX trade.
  • Short Squeeze
    • A short squeeze means buying back a sell position to cut losses, knowing that a loss will result; it is a term used across markets in general, including stock trading and FX trading. Conversely, dumping a buy position knowing that a loss will result is called "panic selling".
  • Short-Term Interest Rate
    • The short-term interest rate is the interest rate applied to fund transactions of less than one year. In contrast, the interest rate applied to fund transactions of one year or more is called the long-term interest rate.
  • Short-Term Money Market
    • The short-term money market is the market in which funds are traded with maturities of less than one year. In contrast, the market in which funds are provided for periods of one year or more is called the long-term money market. There are two short-term money markets: the interbank market, in which banks other than the Bank of Japan trade with each other, and the open market, in which ordinary companies participate. Short-term interest rates formed by these short-term money markets also affect lending rates and ordinary deposit rates.
  • Slippage
    • Slippage is the difference between the order price and the price at which the order is actually executed, arising from factors such as market fluctuations.
  • Solo Fall
    • A solo fall is a term used across markets in general, including stock trading and FX trading, to describe a situation in which only one particular stock or currency is falling even though the market as a whole is rising. Conversely, the situation in which only one particular stock or currency rises sharply is called a "solo rise".
  • Solo Rise
    • A solo rise is a term used across markets in general, including stock trading and FX trading, to describe a situation in which only one particular stock or currency is rising even though the market as a whole is falling. Conversely, the situation in which only one particular stock or currency falls is called a "solo fall". In the FX market, the Japanese yen generally tends to rise on its own. This is because, like the US dollar, the yen is regarded as a safe asset and bought, which tends to increase the yen's volatility.
  • Sovereign Risk
    • Sovereign risk is the risk that the exchange rate of a country's own currency will fall. It is expressed as a measure of the creditworthiness of the country being invested in. It is also called "country risk". Domestic political stability, per-capita income, the trade balance and balance of payments, and other changes in domestic conditions affect sovereign risk. In general, countries and regions with unstable domestic conditions, such as the Middle East and Latin America, are judged to be high-risk, while countries with stable domestic conditions, such as Japan and the United States, are judged to be low-risk. Sovereign risk exists for every country in the world; private credit rating agencies such as Moody's calculate and publish specific figures and risk levels, and even developed countries may be judged to have rising sovereign risk depending on their economic situation.
  • Speculators
    • Speculators are investors in the stock market, FX market and the like whose aim is to profit from short-term trading; they are also called "short-term players". Their trading style is characterised by seeking to profit from exchange-rate fluctuations over relatively short periods, such as minutes, hours, a day or a month. In contrast, market participants whose trading is based on day-to-day economic and business activities and is not influenced by market fluctuations are called real-demand participants.
  • Spread
    • The spread is the difference between the selling price and the buying price quoted to investors by an FX broker. The spread is a trading fee for investors and revenue for the FX broker.
  • Square
    • Square refers to the state in FX trading of holding neither a "sell" nor a "buy" position.
  • Stop Order
    • A stop order is a type of FX order that is placed by specifying the desired trading price in advance. It is also called a "Stop Order".
  • Stop-Loss Order
    • A stop-loss order is an order to close a position you hold in order to avoid further losses when the exchange rate has moved against you and a loss has started to arise. For a buy position it is a stop order to "sell if the price falls to a certain level", and for a sell position it is a stop order to "buy back if the price rises to a certain level".
  • Stop-Loss Poverty
    • Stop-loss poverty refers to a trader or trading method that does nothing but cut losses, so that losses keep piling up.
  • STP Method
    • The STP method is an order-processing method named after the initials of the three words "Straight Through Processing". Together with the ECN (Electronic Communications Network) method, it is commonly used by FX brokers.
  • Summit of Major Countries
    • The Summit of Major Countries is a conference at which the leaders of major countries discuss important issues ranging from the global economy to international affairs, the environment and development. It is also called the "Summit".
  • Support Line
    • A support line is a price zone at which the exchange rate has stopped falling several times in the course of market movements. It is also called a "support level".
  • Swap Points
    • Swap points are the interest-rate differential between the two currencies combined in an FX currency pair. They are also called "swap" for short, or "swap interest".
  • Swing Trading
    • Swing trading is a trading method used in stock trading and FX trading, characterised by earning foreign exchange gains (capital gains) from medium- to long-term price movements over several days to several weeks. Because it is an investment strategy of holding a buy or sell position for as long as an uptrend or downtrend continues, without going against the market trend, it can be said to be the ideal trading style for part-time traders who work during the day.
  • Swiss Franc Shock
    • The Swiss franc shock refers to the turmoil in the FX market triggered by the Swiss National Bank's sudden change in monetary policy announced on 15 January 2015. On that day, the Swiss National Bank announced that it would scrap the cap of "1 euro = 1.20 Swiss francs" on the Swiss franc's rate against the euro, which it had maintained for the previous three years. Immediately after the announcement, the Swiss franc moved sharply, rising 30% against the euro, 26% against the dollar and 47 yen against the yen compared with the previous day.
  • Swiss National Bank
    • The Swiss National Bank is the central bank of the Swiss Confederation. Its main roles are issuing and managing the Swiss franc and implementing the country's monetary policy. It is also sometimes called the "SNB", the abbreviation of its English name.
  • Take Profit
    • Take Profit refers to a trade that locks in an unrealised profit currently arising in stock trading, FX trading and the like; from its English name it is sometimes written as "T/P". It is also called "profit-taking". In FX trading, an unrealised profit can be locked in as a realised profit by placing a buy order at a low exchange rate and closing it with a sell order at a high rate, or by placing a sell order at a high rate and closing it with a buy order at a low rate.
  • Tapering
    • Tapering is a term relating to monetary policy that means scaling back quantitative easing.
  • Technical Analysis
    • Technical analysis is a method of predicting and evaluating future trends in exchange rates or stock prices, and the timing of trades, by statistically analysing internal market data such as past price chart movements and changes in trading volume in the foreign exchange market, stock market and so on.
  • TPP
    • TPP is the abbreviation of the "Trans-Pacific Strategic Economic Partnership Agreement", also called the "Trans-Pacific Partnership Agreement". It is a comprehensive economic partnership agreement among 12 countries around the Pacific.
  • Trade Balance
    • The trade balance is the balance (difference) between a country's exports and imports over a certain period. When the trade balance is positive, that is, exports exceed imports, this is called a trade surplus; conversely, when the trade balance is negative, that is, exports fall short of imports, this is called a trade deficit.
  • Trailing Order
    • A trailing order is one of the order methods for closing a position already held; it is also called a "trailing stop". With a trailing order, the stop-loss price automatically follows the exchange rate as it moves, while maintaining a set distance (the trailing width). When a trail is set on a buy order, the closing price can be raised as the price rises, and on a sell order the stop-loss price can be lowered as the price falls.
  • Treasuries
    • Treasuries are government bonds issued by the United States government (the US Department of the Treasury); they are also called "US government bonds" or "US Treasury securities". Treasuries are issued to cover shortfalls in US government funding and, backed by trust and confidence in the US government, are the bond product with the largest trading volume in the world. They are very popular not only with ordinary investors but also as an investment for foreign governments' dollar-denominated foreign exchange reserves. Treasuries are classified into short-term "Treasury bills" with maturities of up to one year, medium-term "Treasury notes" with maturities of more than one year and up to 10 years, and long-term "Treasury bonds" with maturities of more than 10 years.
  • Trend
    • Trend is a term describing the direction of movement in stock prices or exchange rates. When a chart keeps rising upward it is called an uptrend, and when a chart keeps falling downward it is called a downtrend. When the balance of supply and demand between currencies is disrupted by the release of economic indicators, investor sentiment, world affairs, breaking news and the like, the trend often changes.
  • Trend Following
    • Trend following means trading in the same direction as the market trend.
  • Unemployment Rate
    • The unemployment rate is the proportion of unemployed people in the labour force. It is a representative economic indicator referred to when assessing a country's employment situation. In general, like the rate of inflation, the unemployment rate is closely linked to people's lives and is an indicator that governments and central banks watch closely. The US unemployment rate in particular attracts a great deal of attention and is published by the US Department of Labor on the first Friday of every month, together with average hourly earnings and non-farm payrolls, as the "Employment Report". When the US Employment Report is released, the dollar is very likely to move sharply, making it one of the most important events in the FX market.
  • University of Michigan Consumer Sentiment Index
    • The University of Michigan Consumer Sentiment Index is an economic indicator compiled from a survey on consumer sentiment conducted by the Survey Research Center of the University of Michigan in the United States.
  • Unrealised Loss
    • The state in which assets such as stocks, foreign currencies or real estate have fallen below their value at the time of acquisition because of price movements is described as "having an unrealised loss"; it is also called a "valuation loss" or a "negative spread". Because market prices for stocks, foreign currencies, FX currency pairs, real estate and the like are constantly changing, the value of the assets and positions held changes continuously with these movements. An unrealised loss is a loss valued at the current price, and the amount of the loss is not fixed until the asset is actually sold or the position closed. Conversely, the state in which the value of an asset held has risen above its value at the time of acquisition and a profit has arisen is described as "having an unrealised profit".
  • Unrealised Profit
    • An unrealised profit is a profit that arises when the value of an asset held, such as stocks or foreign currency, has risen above its value at the time of acquisition because of price movements; it is also called a "valuation gain" or a "profit margin". Because market prices for stocks, foreign currencies, FX currency pairs, real estate and the like are constantly changing, the value of the assets and positions held changes continuously with these movements; an unrealised profit is therefore a profit valued at the current price, and its amount is not fixed until the asset is actually sold or the position closed. Conversely, the state in which the value of an asset held has fallen below its value at the time of acquisition and a loss has arisen is described as "having an unrealised loss".
  • US Employment Report
    • The US Employment Report is a series of statistical reports published by the US Department of Labor on the first Friday of every month. It consists of 10 items, including the unemployment rate, the change in non-farm payrolls and average hourly earnings.
  • Valuation Gain
    • A valuation gain is a profit that arises when the value of an asset held, such as stocks or foreign currency, has risen above its value at the time of acquisition because of price movements; it is also called an "unrealised profit" or a "profit margin".
  • Valuation Loss
    • A valuation loss is a loss that arises because the current price of an asset currently held is lower than at the time it was acquired; it is also called an "unrealised loss" or a "negative spread".
  • Value Date
    • The value date is the "delivery date" on which assets or goods are actually delivered after a sales contract has been concluded. Weekends and public holidays in the countries of the currencies concerned are excluded from value dates; however, when the United States is among the countries of the currencies concerned, special cases need to be taken into account, such as US public holidays being counted as business days, except in cases where a US public holiday becomes the value date.
  • Verbal Intervention
    • Verbal intervention means that, rather than actually intervening in the market by buying and selling currency, government officials or financial authorities deliberately make statements intended to influence the exchange rate of their own currency.
  • VIX Index
    • The VIX Index is an index calculated and published by the Chicago Board Options Exchange based on the volatility of options on the stock index "S&P500"; it is also known as the "fear index". The VIX Index is used as an indicator reflecting investor sentiment: the higher the value, the more investors are judged to be anxious about the market outlook.
  • Volatility
    • Volatility is the rate of fluctuation of a price; since the 1980s, with the development of financial engineering, the word volatility has become well known as a measure of the size of fluctuations in asset prices. It applies not only to FX but widely to stocks, bonds, commodities and more. In general, when market price fluctuations are large, volatility is high, and conversely when price fluctuations are small, volatility is low.
  • Vulture Fund
    • A slang term used ironically for a fund that, when launching an acquisition, aims to buy the target company's shares, bonds and the like when they have become cheap, becomes deeply involved in managing the company to raise its corporate value, and then sells it to earn a high return. The term comes from the way a vulture targets its prey when the prey is weak, so that it is easier to catch.
  • Wilder's RSI
    • A representative oscillator-type technical indicator devised by J. W. Wilder. RSI seeks to measure market dynamics by quantifying the changes between each day's closing price and the previous day's closing price over the past 9 or 14 days on a daily chart.
  • World Economic Forum
    • The World Economic Forum is a non-profit public-interest foundation whose members include the world's major companies and leading organisations. Its forerunner was the "European Management Forum", proposed by the Swiss businessman and management scholar Klaus Schwab and held in Davos in 1971. It changed to its current name in 1987 and is headquartered in Geneva.
  • WTI
    • WTI is a crude oil futures contract traded on the New York Mercantile Exchange (NYMEX), said to be one of the largest futures markets in the world.
  • Yen Carry Trade
    • The yen carry trade is an investment strategy in which funds are borrowed in Japanese yen, which has low interest rates by global standards, and invested in emerging-market currencies and other assets expected to offer higher interest rates. It is also called "yen carry trading".
      In the yen carry trade, high returns can be achieved because profit is earned both from the investment itself and from the interest-rate differential with the yen. It is said that institutional investors such as hedge funds, securities firms and insurance companies handling huge sums are mainly the ones actively engaged in the yen carry trade.
      Funds that use money raised in yen to invest in the Australian dollar or gold are often mentioned in economic news.
  • Yield Curve
    • A yield curve is a graph showing the relationship between interest rates and maturity. It is also known as the "yield-to-maturity curve". It is drawn with interest rates on the vertical axis and maturity on the horizontal axis.
  • Yield Curve Control
    • Yield Curve Control is a monetary policy of a central bank that keeps the yield curve at a desired level by steering long-term and short-term interest rates.
  • Zero Interest Rate Policy
    • The zero interest rate policy is a monetary policy method in which a central bank guides the level of its policy interest rate to effectively 0%.
  • Zero-Sum
    • Zero-sum means that everything adds up to zero. It is a concept born from game theory, a branch of economics, in which one party's gain means another party's loss. In general, in FX trading, futures trading and the like, when one party makes a profit the other makes a loss, so that overall the result is net zero. Trading carried out under such zero-sum conditions is called a zero-sum game.
  • ZEW Economic Sentiment Index
    • The ZEW Economic Sentiment Index is the result of a survey on business sentiment in Germany, published by Germany's ZEW (Zentrum fur Europaische Wirtschaftsforschung, Centre for European Economic Research).
To page TOP