CBOT SEES YEN BOND FUTURES LISTING IN SIX MONTHS
The Chicago Board of Trade (CBOT) will
list yen bond futures contracts once the U.S. Commodity Futures
Trading Commission gives its approval, which could come within
six months, CBOT chairman Karsten Mahlmann said.
    Mahlmann earlier told a press conference he would visit
Kyoji Kitamura, director-general of the Finance Ministry's
Securities Bureau, to express the CBOT's concern that Japanese
financial institutions and individuals are not permitted to
trade on the CBOT. Mahlmann is on a two-week tour of Hong Kong,
Tokyo and Sydney.
    Mahlmann urged Japan to boost Tokyo's status as a world
financial center by promoting the internationalisation of its
financial industry.
    The Finance Ministry is expected to allow local banks,
securities houses and insurance companies to use overseas
markets from this month, bond market sources said, but
officials would only say the issue was under study.
    Initially, the ministry is likely to bar corporate and
individual investors due to their relative inexperience, and to
limit trading to instruments like currency, stock indexes, time
deposits and government debt futures, the sources said.
    Mahlmann told reporters the CBOT will start evening trading
to coincide with Far East morning activity on April 30. But he
added night sessions would not preclude the CBOT from forming
links with Far Eastern exchanges, although nothing had been
decided.
    Asked what type of financial futures would be appropriate,
he cited products concerning debt and equity.
    The CBOT evening session will run from 6:00 to 9:00 P.M.
Chicago time (2300 to 0200 GMT), which is 8:00 to 11:00 A.M. In
Tokyo, and trading will be limited to four contracts -- U.S.
Treasury note and bond futures and options, he said.
    Yen bond dealers said a proposed link between CBOT and the
London International Financial Futures Exchange (LIFFE),
combined with yen bond futures listings on both, would multiply
volume if trade was encouraged by Tokyo-based orders.
    Healthy liquidity growth in cash yen bond markets overseas
is a prerequisite for expanded futures trading, traders said.
    LIFFE plans to list yen bond futures should go ahead from
September, possibly coinciding with the CBOT, traders said.
    The CBOT applied for permission to offer a long-term
Japanese government bond futures contract on March 17, and the
authorities must rule on the request within a year.
 REUTER
