There are many forex brokers available in Japan, but we do not recommend brokers operated by Japanese companies. Financial laws applicable to brokers based in Japan prohibit brokers from compensating investors for losses and limit the maximum leverage to 25x. Additionally, bonus systems that are highly attractive to investors are also restricted. If you want to engage in forex trading with an environment comparable to overseas standards, use brokers based overseas.
In this article, we will introduce recommended overseas brokers available from Japan and discuss the taxes on forex in Japan.
- For those with Japanese nationality: Traders often recommend XMTrading, which ranks No.1 in popularity. By opening an account for free, you can receive trading credits worth 13,000 yen.
→XMTrading in detail - For those without a Japanese ID: XMGlobal is highly recommended. It’s also part of the XMGroup but offers services specifically for foreign nationals.
→XMTrading in detail - For intermediate and advanced traders: Exness is recommended for its unlimited leverage and low spreads.
→Exness in detail
Recommended Forex Trading Brokers in JAPAN
The recommended forex brokers in Japan are XM Group and Exness.
| Trading Conditions |  |  |
|---|---|---|
| Available Instruments | Currency Pairs, Cryptocurrencies, Precious Metals, Energy, Stock Indices, Stocks, Commodities, Specific Theme Indices | Currency Pairs, Cryptocurrencies, Precious Metals, Energy, Stock Indices, Stocks |
| Maximum Leverage | 1,000x | Unlimited |
| Zero Cut （compensating traders for losses） | Yes | Yes |
| Bonus | Available | None |
| Minimum Initial Deposit | $5 | $150 |
| Supported Currencies | 11 Types | 44 Types |
| English Language Support | Supported | Supported |
| Target Audience | Beginner and above | Intermediate and above |
| GET STARTED | 【JP ID Holders】 ▶︎Register Account （XMTrading） 【non JP Residents】 ▶︎Register Account （XM.COM） | Register Account |
Forex brokers based in Japan are legally prohibited from compensating traders for losses and offering leverage of 25x or higher under Japanese law. Therefore, you should use forex brokers that are based overseas and operate outside the scope of Japanese law.
Next, let’s introduce the differences between XM Global and Exness. Understand each feature to choose the best broker for you.
Features of XMGroup and Why It’s Popular Among Beginners
For Forex beginners living in Japan, we first recommend XM Group.
The reason lies in XM Group’s characteristics as an international Forex broker.
- Since its establishment in 2009, over 10 million customers from more than 190 countries
- Operated by over 900 experts with many years of experience in the financial industry
- Obtained multiple financial licenses worldwide and share management expertise
For forex traders holding Japanese ID licenses, Japanese residents, XM Group’s XMTrading provides services, proving its reliability as it is the No.1 in the number of Japanese users.
For expatriates living in countries or regions where Forex is tax-free, primarily XM Group’s XM Global offers services.
With two types of bonuses that can increase your trading margin, it is especially popular among Forex beginners.
| Type | Amount |
|---|---|
| Account Opening Bonus (No Deposit Bonus) | $30 |
| Deposit Bonus | Up to $10,500 |
At XM Global, you receive a $30 bonus just for opening an account, allowing you to start trading overseas Forex without depositing any of your own funds.
Additionally, a bonus of up to 100% is granted on your deposited funds. This means you receive a bonus equal to your deposit amount, allowing you to trade with double the capital.
Leverage can be used up to 1,000x. This provides a buffer on your margin, making it less likely to be subject to margin calls.
Furthermore, the Zero Cut System ensures that losses do not exceed your deposit amount, eliminating the worry of additional margin calls like those from Forex brokers based in Japan.
If you are starting Forex in Japan, we recommend taking advantage of the bonuses offered by XM Global first.
Features of Exness and Why It’s Chosen by Intermediate Traders and Above
For those living abroad with extensive Forex experience, we recommend Exness.
With monthly trading volumes among the world’s highest and being highly regarded by intermediate and advanced traders, it is an international Forex broker.
- Possesses one of the world’s most stringent FCA licenses and operates under compliant group management
- Advanced trading environment offering unlimited leverage and fixed zero spreads
- A large-scale platform with over 800,000 monthly users and approximately $4 trillion in monthly trading volume
Exness was established in 2008 and, along with XM Group, leads the overseas Forex industry. With over 800,000 monthly users and approximately $4 trillion in monthly trading, it operates a large-scale platform.
Holding financial licenses from the UK FCA and Cyprus CySEC, Exness continues to provide services internationally while maintaining a safe and secure management foundation 16 years after its establishment.
One of the reasons Exness is chosen by intermediate and advanced traders is its excellent trading conditions. Here are three key points to note.
| Trading Benefits | Trading Conditions |
|---|---|
| Industry-Leading Low Trading Costs | Total costs combining variable spreads and trading commissions are among the lowest |
| Fixed Spreads and Zero Spreads | ・Fixed spreads (all account types) for 10 major pairs 90% of the time ・Zero spreads (zero account only) for 28 major currency pairs 95% of trading time |
| Maximize Capital Efficiency | ・Unlimited leverage available with a 0% margin call level ・Zero cut allows for risk-taking without the worry of margin calls |
Exness focuses on the practicality of its services, particularly featuring low trading costs and fixed spreads advantageous for scalping, which is one of the reasons it is highly valued by intermediate and advanced traders.
On the other hand, unlike XM Global, there are no account opening bonuses, which might make it slightly more challenging for those new to overseas Forex.
However, with over 800,000 monthly users and approximately $4 trillion in monthly trading volume, Exness demonstrates its reliability through its track record. Additionally, Japanese language support is available, allowing expatriates to start Forex trading with confidence.
＼Unlimited Leverage & Lowest Cost！／
When Do Taxes Apply to Forex Profits in Japan?
Taxes on profits from forex in Japan depend on whether you are a salaried employee or not. Let’s look at each case for salaried and non-salaried individuals.
Salaried Employees, such as Office Workers: Annual Income of 200,000 yen or More
Salaried employees, such as office workers, are required to file a tax return if their income from sources other than salary is 200,000 yen or more per year. If you have income from side jobs, it will be combined with profits from forex.
Income is the amount after subtracting expenses from profits. For example, if you have a profit of 300,000 yen and expenses of 200,000 yen, your income is 100,000 yen, so you do not need to file a tax return.
However, even if your annual income from sources other than salary is less than 200,000 yen and thus not subject to income tax, you still need to file a resident tax return if you have even 1 yen of profit. Please file your resident tax return with your local municipality. If you file a tax return, information will be shared with the municipality from the tax office, so separate filing for resident tax is unnecessary.
Also, regardless of whether you file a tax return, taxes on your company’s salary are settled through year-end adjustments.
Non-Salaried Individuals, such as Self-Employed, Housewives, and Unemployed: Annual Income of 480,000 yen or More
Non-salaried individuals (self-employed, housewives, unemployed, etc.) are required to file a tax return if their annual income is 480,000 yen or more. The basic deduction for income tax is 480,000 yen, so if your income is less than 480,000 yen, your taxable income is 0 yen.
The basic deduction is an amount that everyone can deduct from their income. If your income is 24 million yen or less, the basic deduction is 480,000 yen. If your income is between 24 million and 24.5 million yen, it is 320,000 yen. If it is between 24.5 million and 25 million yen, it is 160,000 yen. If it exceeds 25 million yen, the basic deduction is 0 yen.
Even if you do not need to file a tax return because your annual income is less than 480,000 yen, if you have even 1 yen of profit, you need to file a resident tax return, so don’t forget to do so.
What Is the Tax Threshold for Forex Profits in Japan?
For forex traders using overseas(not Japanese) brokers , a progressive tax system applies with rates ranging from approximately 15% to 55%, while forex traders using domestic(Japansese) brokers is subject to a flat rate of 20.315%. Since overseas forex is subject to comprehensive taxation, the tax rate increases as your income grows.
Despite the high taxes, the ability to utilize leverage of 25x or higher and receive loss compensation are significant advantages of using brokers based overseas(not Japansese).
The tax rates and deduction amounts according to income levels under the progressive taxation system are as follows:
| Income Range | Tax Rate | Deduction Amount |
|---|---|---|
| 1,000 yen to 1,949,000 yen | 5% | 0 yen |
| 1,950,000 yen to 3,299,000 yen | 10% | 97,500 yen |
| 3,300,000 yen to 6,949,000 yen | 20% | 427,500 yen |
| 6,950,000 yen to 8,999,000 yen | 23% | 636,000 yen |
| 9,000,000 yen to 17,999,000 yen | 33% | 1,536,000 yen |
| 18,000,000 yen to 39,999,000 yen | 40% | 2,796,000 yen |
| 40,000,000 yen and above | 45% | 4,796,000 yen |
In addition to income tax, a special reconstruction income tax of 2.1% of the income tax and approximately 10% resident tax are imposed. Therefore, for forex, the total tax ranges from approximately 15% to 55%.
・special reconstruction income tax
The special reconstruction income tax is an additional tax imposed on the income tax at a rate of 2.1%. It was introduced to fund reconstruction efforts following the Great East Japan Earthquake in 2011. This tax is calculated by multiplying the income tax by 2.1%, thereby increasing the total tax burden on taxable income.