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 risk-hedging 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 dollar-yen and interest futures would
include Japanese domestic yen certificates of deposit,
three-month Eurodollar deposits and 20-year U.S. 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 Japan's
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.
    Japan's 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.
 REUTER
