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Trends in the Money Market in Japan*1

Results of the Tokyo Money Market Survey (August 2015)

  • *1This is an English translation of Japanese original released on October 9, 2015.

November 20, 2015
Financial Markets Department
Bank of Japan

Overview of the Tokyo Money Market Survey


The Financial Markets Department of the Bank of Japan (the Bank) has conducted the Tokyo Money Market Survey since 2008 to understand developments in the Japanese money market. Initially, this series of surveys was conducted every other year. However, to observe market trends more precisely, the Bank decided to conduct the survey annually beginning with the 2013 survey. In August 2015, the sixth survey in the series was carried out (the survey was conducted as of end of July 2015).

As with the previous surveys, this survey covers all eligible counterparties in the Bank's money market operations, as well as other major participants in the money market. The number of respondents in the survey was 298 (with a response rate of 100 percent), up from 296 in the 2014 survey, due to a rise in the number of eligible counterparties in the Bank's money market operations.

The Bank intends to capture comprehensively and from various angles the situations and structural changes in the money market, utilizing the results of this survey as well as the results of the Bond Market Survey, which was launched this year. The Bank will continue to enhance dialogue with market participants by taking advantage of the Meeting on Market Operations and the newly introduced Bond Market Group, which was established this year, to actively support the relevant parties in their efforts to enhance the Japanese financial markets, including the money market. The Bank intends to contribute significantly to such endeavors in its capacity as Japan's central bank.


The amount outstanding in the money market increased, with that on the cash borrowing side marking the highest figure since the survey was first conducted in 2008.

It appears that the increase in the cash borrowing side was underpinned by factors such as (1) an increase in arbitrage transactions against a benchmark of the 0.1 percent interest rate paid by the Bank on excess reserves under the complementary deposit facility; and (2) an increase in yen funding through the foreign exchange (FX) swap market by those holding foreign currencies, driven by the decline in the FX swap-implied yen rate.

On the cash lending side, market participants such as investment trusts, whose surplus funds increased due to rising stock prices, boosted lending in the money market, while there was also an expansion in yen lending through the FX swap market aimed at making overseas loans or investment in assets in foreign currencies. In these circumstances, as yields on treasury discount bills (T-Bills) generally hovered at around zero percent, some market participants increased transactions in the call market (including both uncollateralized and collateralized transactions) to secure investment yields.

Meanwhile, although about 20 percent of all respondents replied that the functioning of the money market had decreased from the previous year against the backdrop of a fall in yields, some 70 percent of all respondents replied that it had remained more or less unchanged from the previous year.

These results suggest that the functions of the Japanese money market have been maintained on the whole. However, the Bank intends to continue to observe closely the developments in the money market through day-to-day monitoring activities, implementation of the Tokyo Money Market Survey, and dialogue with market participants.


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Financial Markets Department, Bank of Japan
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Market Infrastructure Group, Market Infrastructure Division, Financial Markets Department

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