Japanese Government Bond (JGB) Futures

About JGB Futures

The underlying of JGB Futures are standardized bonds which are set with a coupon rate and a maturity by an exchange for the standardization. For the final settlement of JGB Futures, one of the deliverable grades will be delivered because standardized bonds are unreal bonds.

Function of JGB Futures

  1. Providing the tool for hedge against interest rate fluctuation with low cost.
  2. Contributing to the stability and the expanding for the secondary market of JGB because JGB dealer could hold enough stock of JGB.
  3. Contributing to the stability and the expanding for the primary market of JGB because futures could be used for hedge against JGB underwriting risk.
  4. Expecting to improve the quality of the data used for pricing JGB because the futures price is likely to be an indicator of future JGB price
  5. Contributing to diversification of investment and activation of trading through providing new investment tool to investors.

Line-up

Osaka Exchange, Inc. provides four JGB Futures.

5-year JGB Futures
10-year JGB Futures
20-year JGB Futures
mini 10-year JGB Futures

Flyer

Overview of Japanese Government Bond Futures & Options (Flyer)