Tokyo Financial Exchange launches futures tied to Bank of Japan rate
What happened
The Tokyo Financial Exchange is launching futures tied to the Bank of Japan's target overnight rate (TONA) this month. This contract allows traders to position for rate changes between Bank of Japan policy meetings. The instrument is designed to give the yen market a clear read on the odds of a Bank of Japan hike at each decision.
From investinglive.com
Why it matters
The new contract could make yen movements around Bank of Japan meetings more orderly by pricing surprises earlier. It may also sharpen market reactions to official comments and economic data between policy meetings. Furthermore, easier hedging of short-term rate risk could support activity in Japanese government bonds and yen carry trades.
From investinglive.com
Who's involved
- Bank of JapanCentral bank of Japan
- BOJCommon acronym for the Bank of Japan
- Kazuo UedaGovernor of the Bank of Japan
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- US Dollar (Next day)Speculative
Increased clarity on Bank of Japan hike odds could affect US Dollar/Yen currency flows and carry trades.
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The entities involved
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Bank of Japan
the central bank of Japan
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FED
business
Related events
- The International Monetary Fund projects that the Bank of Japan will gradually raise interest rates.
- BOJ rate hike speculation causes Yen surge and risk asset dumping, leading to foreign reserve depletion and market shifts affecting digital assets.
- Markets are preparing for the Fed's Jackson Hole symposium while focusing on the Bank of Japan's upcoming rate hike.
- The central bank of Japan is currently managing monetary policy for the nation.
- BoJ intervention is expected due to weak yen, following reports on Euro area inflation data.