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LONDON, May 17 (Reuters) - Foreign exchange trading through online retail brokers fell by just over 3 percent in the first quarter of 2017, driven chiefly by a fall-off for the massive Japanese firms who dominate the global trade, industry data showed on Wednesday.
The data from industry researchers Finance Magnates Business Intelligence (www.financemagnates.com) showed volumes falling to the equivalent of $356 billion a day, down from $368 billion in the last quarter of 2016 and $364 billion a year ago.
Its data, based on a mix of company publications, national data and estimates that have not been checked by Reuters, showed Japanese brokers did $161 billion a day versus $167 billion in the previous quarter and $189 billion 12 months ago.
The boost to volatility from U.S. and French elections since late last year, however, has helped prop up non-Japanese brokers including IG Group as they battle through a clampdown on regulation of the sector in Europe and the United States.
Average daily volumes for non-Japanese brokers rose from 175 billion a day a year ago to roughly $200 billion a day in the past three quarters. It was just under that figure at $195 billion in the first quarter.
"Although the first months (of the year) are usually better than traditionally slow December, this time the rebound was not that spectacular," Finance Magnates said in the quarterly report.
"February was ... worse than January with an average industry decrease of more that 15 percent compared to the first month of the year. Solid growth was observed in March."
One big shake-up at the start of this year was the closure of FXCM's U.S. business after regulatory action against members of the company's management.
FXCM volumes fell to an average of $10.6 billion a day in the first quarter from $14 billion a year ago. The company said earlier this week that they fell further, to $8.8 billion a day, in April.
The retail sector has grown steadily in the last five years after originally being seen as a sideshow to the trading between banks and big investment and pension funds that forms the core of the $5 trillion a day global market in currencies.
A retreat in wholesale volumes has also made retail accounts a larger part of overall market activity and a target market for a number of major banks' FX business models.
The two top European brokers were IG, with volumes of $22 billion a day on average and Denmark's Saxo Bank, with $16.6 billion. Only IG placed in the top 10 globally behind Asian-based operators led by GMO Click Securities and DMM.com Securities. (Writing by Patrick Graham; Editing by Tom Heneghan)