Energy Product Derivatives - Japan

Japan

The nominal value in the Energy Product Derivatives market is projected to reach €36.65bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 1.33% resulting in a projected total amount of €39.16bn by 2029.
The average price per contract in the Energy Product Derivatives market amounts to €0.01 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in the United States (€24,700.00bn in 2024).
In the Energy Product Derivatives market, the number of contracts is expected to amount to 2.64m by 2029.

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Analyst Opinion

The Energy Product Derivatives market in Japan is experiencing a significant surge in trading activities and product innovation.

Customer preferences: Investors in Japan are increasingly drawn to Energy Product Derivatives due to their potential for high returns and portfolio diversification. The market offers a wide range of derivative products, allowing investors to hedge against energy price fluctuations and speculate on market movements.

Trends in the market: One notable trend in the Energy Product Derivatives market in Japan is the growing interest in renewable energy derivatives. As the country aims to increase its renewable energy capacity, there is a rising demand for derivatives linked to solar, wind, and other green energy sources. This trend is in line with global efforts towards sustainability and environmental consciousness.

Local special circumstances: Japan's energy landscape is unique, with a heavy reliance on imported fossil fuels due to the limited domestic energy resources. This dependency on energy imports makes the country particularly sensitive to global energy price fluctuations, driving the demand for energy derivatives as a risk management tool. Additionally, the government's push towards renewable energy and energy efficiency initiatives is shaping the development of the Energy Product Derivatives market in Japan.

Underlying macroeconomic factors: The overall economic stability and regulatory environment in Japan play a crucial role in shaping the Energy Product Derivatives market. As the country navigates through economic uncertainties and policy changes, investors turn to derivatives as a way to manage risks and capitalize on market opportunities. The low-interest-rate environment and evolving energy policies further contribute to the growth and dynamism of the Energy Product Derivatives market in Japan.

Methodology

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.