TOKYO, June 7 (Reuters) – Goldman Sachs Group (GS.N) plans to set up a Tokyo office to begin trading Japan’s power derivatives, two people familiar with the matter told Reuters on Wednesday.
A growing number of foreign energy companies and banks are seeking access to Japan’s electricity market, which was launched in 2016 after the 2011 Fukushima nuclear disaster and boosted trading activities by producers, consumers and distributors.
Interest in trading rose amid growing liquidity in Japan’s power futures markets as volatility in power prices increased following the Russian invasion of Ukraine. According to the sources, the electricity crisis has increased the need for hedging among electricity suppliers and consumers.
According to the sources, Goldman Sachs hired some traders in Tokyo and requested anonymity as the matter is still confidential.
A spokesman for Goldman Sachs declined to comment.
According to EEX data, the Japanese power futures trading volume on the European Energy Exchange (EEX) in January-April almost quadrupled to 6.3 terawatt hours (TWh) compared to the same period last year.
EEX, a unit of Deutsche Börse (DB1Gn.DE), launched the clearing service for Japanese power futures in May 2020 and the trading volume has been growing steadily.
Reporting by Yuka Obayashi; Edited by Sherry Jacob-Phillips and Jacqueline Wong
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