Margin squeeze benefits Japan derivatives dealers

The growing number of domestic banks in Japan now participating in the FX market has speeded up the margin compression seen in the rest of the world, and reportedly prompted banks such as Merrill Lynch, Morgan Stanley and JP Morgan to build up options and structured products. "People are trying to increase the margin of more complicated structured products," said one head hunter in Tokyo. "That seems to be where a lot more people are going."

Currency volatility

He said demand for FX derivative