Amadeusz Juskowiak

Japanese financial futures plan revealed

The Federation of Bankers Associations of Japan released its proposal for early creation of a comprehensive financial futures market in Tokyo

The market should include a comprehensive range of futures and options trading so Tokyo can develop into a real global money centre where a variety of riskhedging instruments is available the proposal said

It should provide currency and interest rate futures and incorporate the existing yen bond futures and planned stock index futures contracts

The proposal said transactions in all these contracts must be conducted on the same market so participants can readily engage in arbitrage between various financial instruments

To make this possible the proposal calls for new legislation which would administer all related futures and options transactions under the same legal framework

Banking sources said they expect that initially the currency futures would be dollaryen and interest futures would include Japanese domestic yen certificates of deposit threemonth Eurodollar deposits and 20year US Treasury bonds

Banking sources quoted federation chairman Yoshiro Araki as saying he hoped the market would be created as soon as possible because it would help promote the liberalisation of Japans financial markets

Araki said he had no intention of limiting prospective market participants to banks but was willing to accept those from wider business circles the sources said

Japans only current financial futures market in yen bonds began on the Tokyo Stock Exchange in October 1985

But the Osaka Stock Exchange plans to start futures trading in a basket of leading stocks in April