Japan’s Derivatives Market: Toward Greater Stability and Transparency

by KyongSun Kong, July 30, 2012
Industry Trends
Asia-Pacific

Abstract

In recent years, repeated revisions of regulation tightening have been undertaken to boost the stability and transparency of Japan’s derivatives market. These have paid dividends, and the nation’s derivatives market has been enjoying sound if modest growth. However, to continue this growth, efforts to increase market stability and transparency will be needed.

In this new report, Japan’s Derivatives Market: Toward Greater Stability and Transparency, Celent examines the current state of Japan’s domestic derivatives market and analyzes its potential for future development. The report also examines the current states of and contrasting tendencies between the domestic listed derivatives market and the over-the-counter derivatives market while offering an international comparison and in-depth analysis of transaction and trading volumes.

In 2011, Japan’s listed derivatives market recorded 404.3 million transactions. While this level pales in comparison with the world’s major derivatives exchange, transaction volume is growing steadily. Japan’s OTC derivatives market in 2011 logged approximately 5.1 million transactions, accounting for approximately one-fourth of all such global transactions.

“For Japan’s derivatives market to maintain growth, it needs to win the trust of investors by continuing efforts to boost stability and transparency,” says KyongSun Kong, an Analyst with Celent's Asian Financial Services Group and author of the report.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

3

Japan’s Economic Environment

4

Japan’s Regulatory Environment

6

Japan’s Derivatives Market in a
Global Context

9

Listed Derivatives Market in Japan

11

Japan’s OTC Derivatives Market

17

Factors Driving Future Market Growth

19

Conclusions

23

Leveraging Celent’s Expertise

25

Related Celent Research

26

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