The Tokyo Financial Exchange will launch a new futures contract tied to the Bank of Japan’s overnight call rate this month, seeking to give traders a tool to hedge growing interest-rate volatility as the central bank moves into a more active phase of policy tightening, as per a report by Reuters.
According to Reuters, the new contract lets market participants position for interest-rate changes between BOJ policy meetings, as expectations for the timing and pace of further rate hikes become increasingly important for Japan’s financial markets.
