UBS targets yen flows with forex hiring spree

UBS has made a series of senior hires and internal promotions on its foreign exchange desk in Tokyo as it seeks to capitalise on Japan’s resilient currency flows.

“UBS is re-establishing itself as a global leader in foreign exchange,” according to an internal email sent last week by Lutfey Siddiqi, Asia-Pacific head of corporate coverage and FX distribution within fixed income, currencies and commodities (Ficc), and Joe Etheridge, who was recently appointed head of Japan foreign exchange sales in addition to his role as deputy head of Ficc. “As one of the world’s largest and most vibrant foreign exchange markets, Japan is attracting significant investments by the firm.”

The new hires are all at the executive director level: Toshimasa Fujii from Barclays Bank, as head of e-commerce sales; John Shen-Nagakura from Societe Generale, as head of FX corporate sales; and Ko Haruki from Goldman Sachs, as head of the bank’s real money sales team.

Fujii held a similar role at Barclays and will be responsible for leveraging UBS’s recent investments in its e-trading platform, including the roll-out of algorithmic pricing that started in July. Siddiqi, who himself joined UBS from Barclays a year ago, said Fujii and his team will primarily focus on increasing market share among margin FX brokers, which is a critical client segment in Japan.

Shen-Nagakura, a 20-year FX veteran, previously led SG’s corporate sales unit and will help UBS to deepen its relationships with Japanese companies.

Haruki, who also has more than 20 years’ experience, will be responsible for building sales to life insurers and asset managers, in partnership with Kentaro Noguchi, who joined UBS from J.P. Morgan in November 2010, also as an executive director.

All three will work alongside Hirotsugu Inoue, head of FX bank sales.

Total FX volume in Japan increased by about 10% last year, in contrast to a 20% decline in the rest of the world, according to Greenwich Associates. However, Japan’s famous appetite for the yen carry trade has taken a knock recently as the currency has appreciated to record levels and interest rates around the world have sunk to all-time lows. Stricter margin requirements have also made it more difficult for Japanese retail investors to play the currency markets.

Even so, positions in favoured currencies such as the Australian dollar are still close to historic highs and a spokesman at UBS said the bank sees a “tremendous opportunity to expand our business with the margin FX brokers that service retail clients”.

At the same time, Japan’s slow growth provides ample motivation for domestic companies to expand overseas and that is creating growing demand for corporate FX solutions in global currencies, which suits banks with strong international franchises.