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Japan’s forex brokers report a drop of 35% in currency forex trading volumes between July and August, when 50:1 leverage limit was introduced. Oz Golan writes on Michael Greenberg’s site about the phenomenon and says that it may have an effect only for a short time, as traders will be more profitable due to lower leverage.

Does lower leverage improve profitability? We’ll see it in the next report by the CFTC regarding broker profitability.

Will we see decreasing volumes also in the US?