Japan's two largest foreign exchange brokers on Monday announced an agreement to set up a joint company in September to handle their brokerage business and foreign currency lending in an effort to raise profitability.
Tokyo Forex Co. and Ueda Harlow Ltd. agreed in late July that the new company, Tokyo Forex Ueda Harlow, to be capitalized at 150 million yen, will start operations in October.
Each company has a 50 percent stake in the new entity.
The two companies have been suffering from sluggish performance in the brokerage business and foreign currency lending due to the rise of electronic trading and thus decided to launch the new firm, they said.
Trading at the two companies is done by telephone.
Tokyo Forex, Japan's largest foreign exchange broker, was established in 1978, while Ueda Harlow, the second-largest, was set up in 1984.
After transferring their foreign exchange business to the new entity, the two companies will focus on derivatives trading, they said.