MUFG is bolstering its FX franchise amid a rising interest rate environment that has led investors to renew their attention in the Japanese FX market. MUFG’s domestic success and growing onshore presence have strengthened the firm’s ambition to become an Asia powerhouse in FX

After decades of ultra-low interest rates, the Bank of Japan’s determination to gradually raise rates has caught the attention of global market participants. Combined with the recent volatility of the yen, Japan’s new interest rate environment has led international actors to seek the services of such firms as MUFG, which can provide access to broad and deep liquidity in the Japanese market as well as low-latency trading, efficient execution and extensive knowledge of the specificities of the Japanese market.

MUFG is the prime FX liquidity provider in Japan. With a banking presence in the country for more than 360 years, the firm has established deep and profound relationships with a wide array of FX market participants. Like its international counterparts, this domestic client base has become more sophisticated. As a result, the bank has invested heavily in its FX franchise to provide corporates, financial institutions, insurance firms and banks with the means to compete in Japan, Asia and worldwide.

MUFG has broadened the scope of bespoke solutions available to domestic and international clients to cater to these evolving needs. The bank has diversified the number of accessible trading channels, with a particular focus on electronic trading, and has invested heavily in this area to help clients trade more efficiently.

“We’ve made great efforts to invest in and extend our technology capabilities that we’ve developed for our core clients, domestic and global corporates,” says David Wright, global head of FX trading and distribution at MUFG. “Straight-through processing of FX transactions is becoming more prevalent in Japan, and this goes hand in hand with MUFG’s push for digital solutions in transaction banking and payments.”

As the activities of Japanese FX market participants have become more mature, their centre of attention has also become more global. To this end, MUFG is actively broadening its outreach across the world, and in Asia in particular. With an onshore presence in 18 markets across the Asia-Pacific region, MUFG is deeply entrenched and determined to use its strong base in Japan to intensify its operations.

“With the recent unprecedented volatility experienced in global markets, we work with our clients to assure access and liquidity to global markets, including FX. As the largest financial institution in Japan, MUFG is the go-to FX bank in the country,” says Wright. “While we appreciate and continue to focus on our clients in Japan, we want to leverage our position to grow globally. We are present in more than 40 markets worldwide, but focused on expanding our footprint in Asia. Our goal is to become an Asia powerhouse, providing exceptional service to clients in the region and global clients accessing markets in Asia.”

To achieve this, MUFG has expanded its e-FX capabilities in line with the expectations of clients at home and abroad. A key component of MUFG’s strategy to extend the reach and scope of its e-FX franchise is its partnership with Morgan Stanley. In 2008, the two banks formed a strategic alliance to collaborate within global investment banking and, in 2010, established their Japanese securities joint ventures. In 2024, the partnership was further enhanced to include the FX business.

“The rapid electronification of FX trading and the introduction of global financial regulations in recent years have brought about operational and technological challenges that required substantial investment in FX trading technologies,” explains Wright. “Given the productive collaboration between MUFG and Morgan Stanley, both banks decided to enhance the scale of that collaboration to leverage the complementary strengths of each party. MUFG’s immense balance sheet and solid infrastructure in Japan, together with the strength of Morgan Stanley, provide MUFG with a truly global capability.”

As part of the initiative, dubbed Alliance 2.0, the collaboration makes it possible for MUFG to leverage Morgan Stanley’s market-leading FX technology and infrastructure to better service MUFG’s clients through enhanced risk management and execution efficiency.

MUFG was named FX house of the year Japan at the FX Markets Asia Awards 2025.