Marketwatch.com reported that E*Trade Securities Co. (Tokyo JASDAQ: 8701) has said it is lowering its stock-broking fees as of June 1st. This is an obvious "preemptive" attack on the May launch of Nomura Holdings' (NMR) standalone brokerage Joinvest, which has previously touted it would be competitive in commissions pricing. There had been doubts that Joinvest could beat E*Trade Japan on price and maybe that discussion is over after today's news. E*Trade Japan is now giving away free trades for transactions totaling less than 100,000 yen (US$850) per day while charging only 315 yen (US$2.70) -- down from 525 yen -- for transactions up to 300,000 yen per day (US$2,555).
This is another situation where consumers benefit from competition. The industry becomes ever more competitive and firms must innovate in order to differentiate or simply keep lowering prices. E*Trade Japan may be able to win on volume but it is squeezing itself and better hope for a prolonged bull market. At least its bold move doesn't bode well for Joinvest, which hasn't even opened for business yet.