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Stocks

Japan's retail stock traders begin tapping power of AI

Brokerages offering ultrashort-term predictions and personalized advice

Artificial intelligence services are helping brokerages compete for retail investors' business.

TOKYO -- Japan's brokerages are bringing the power of predictive stock market analysis to the masses with new artificial intelligence tools, drawing on past trends and customers' own behavior to offer guidance.

SMBC Nikko Securities will begin Friday piloting an AI-based stock trend forecaster in partnership with Tokyo-based startup Zaisan Net. The program analyzes language used in past market news and movement in relevant stocks to predict how prices will shift 30 minutes after important news breaks. It uses deep learning, a type of machine learning in which computers figure out their own rules for sorting through data.

Next Tuesday, the brokerage will start offering a tool that predicts any premiums margin-trading clients will be charged for borrowing popular shares for short trades -- the first feature of its kind for retail investors in Japan, according to SMBC Nikko. These predictions will update around once a month at first, but will grow more frequent starting in April.

Meanwhile, Daiwa Securities, part of Daiwa Securities Group, plans to begin providing market analysis via chatbot by the end of the year.

Online brokerage Kabu.com Securities begins Thursday offering users personalized advice on trading futures and options based on how they believe the Nikkei Stock Average will move. Clients will also be able to simulate how their positions would perform after a major shock like the Lehman Brothers collapse.

Monex will join the AI bandwagon in January, issuing personalized foreign exchange trading recommendations based on clients' past trading behavior. Tokyo startup Heroz, which has created AI systems capable of defeating professional players of shogi, or Japanese chess, helped develop the program for the Monex Group member.

AI-based proprietary services like these give brokerages another way to draw retail investors besides low commissions. SMBC Nikko aims double its online trading accounts to 1 million under its current medium-term business plan.

(Nikkei)

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