Leading spread betting and CFD brokerage outfit IG Group has reported a loss on its first half financial reports, an event it attributes to a cap on leverage imposed by Japanese authorities which it has forecast will continue to hamper its growth in the region and affect both the brand and client goodwill.

Leading brokerage services company IG Group has announced it has realised a net loss over the first six months of its financial year, down to around £80m from a profit of £50m from the same half last year.

IG Group, which owns and operates brands such as IG Index and IG Markets, attributed much of the loss to charges against its accounts, taken to reflect the damage done to the business by a cap on the levels of leverage allowed in Japanese trading.

After extensive investment in the Japanese market, moves by the authorities to clamp down on the percentage of leverage permitted in transactions has been a significant blow to IG Group, with the need to cut back costs and exposure in the Japanese market now a pressing priority.

It is estimated that moves to curb leveraged trading could halve IG Group’s earnings in the Japanese market, leaving the outlook for the second half in the region looking bleak.

IG Group’s shares lost over 20% of their value on the news, while the group vowed to cut the costs of its Japanese operations over the next two years.