TONA futures offer 'greater precision' for policy-led strategies – paper.

A research paper published by Japan Exchange Group (JPX) has shown that the new Japanese risk-free rate derivatives, known as TONA futures, allow traders to hedge interest rate hikes more precisely. The paper suggests that uncollateralized overnight call transactions used to formulate the Tokyo Overnight Average Rate (TONA) are a better instrument for traders to position themselves for possible rate changes. The Osaka Exchange (OSE), a subsidiary of JPX, launched its three-month TONA future in May last year, competing with the Tokyo Financial Exchange (TFX). The paper also discusses the increased daily volume of the underlying transactions that make up the rate. [Extracted from the article]