Goldman Sachs Group intends to open a desk in Tokyo to begin trading Japanese power contracts on Wednesday.
Since the Fukushima nuclear accident in 2011, which resulted in the launch of the Japanese power market in 2016, more global energy businesses and banks are vying for access to it, stimulating trading activity among generators, consumers, and distributors.
The increased volatility of electricity prices following Russia’s invasion of Ukraine increased trading interest amid expanding liquidity in Japan’s power futures markets. According to the sources, both power suppliers and purchasers saw a greater need for hedging as a result of the power crisis.
The sources requested anonymity because the information is still private, but they said that Goldman Sachs has employed some traders in Tokyo.
Goldman Sachs declined to comment through a spokeswoman.
According to the European Energy Exchange (EEX), the volume of Japanese power futures trade increased by over four times during the January-April period compared to the same time the previous year, reaching 6.3 terawatt hours (TWh).
The clearing service for Japanese power futures was introduced by The EEX, a division of Deutsche Boerse, in May 2020, and trading volume has been gradually increasing since then.
