Japan money market
Wiki route
This entry sits under money-market index. Read it against Call market structure for peer / contrast context and BoJ open market operations for the broader system / regulatory boundary.
TL;DR
Japan’s money market is the short-term funding and liquidity-adjustment layer where the Bank of Japan implements monetary policy, financial institutions manage reserve / settlement balances, and tanshi companies intermediate short-term funds. The most important operating signal is the uncollateralized overnight call rate, because BoJ guidelines for money market operations use it as the short-rate target in the current framework.
This page is the domain overview. Use call market structure for the call-market mechanism and BoJ open market operations for implementation tools.
Market Map
| Layer | Function | FinWiki route |
|---|---|---|
| Policy decision | BoJ Policy Board sets the guideline for money market operations at MPMs. | boj-monetary-policy |
| Operating market | Short-term rate formation, especially uncollateralized overnight call transactions. | call-market-structure |
| Market operations | BoJ supplies or absorbs funds through open market operations. | boj-open-market-operations |
| Intermediaries | Banks, securities firms, trust banks, and tanshi companies manage short-term liquidity. | tokyo-tanshi, central-tanshi, ueda-yagi-tanshi |
| Data layer | BoJ publishes call money market data and market-operation results. | BoJ statistics / market-operation releases |
Why It Matters
Money-market structure is the transmission belt between monetary policy and financial-company earnings:
- Megabanks: reserve balances, deposit beta, loan repricing, JGB portfolio valuation, and wholesale funding costs.
- Trust banks / custody banks: settlement liquidity, collateral movement, and short-rate effects on institutional cash.
- Securities firms: repo, collateral finance, JGB market-making, and yield-curve activity.
- Tanshi companies: brokerage demand and call-market activity, especially when short-rate normalization revives overnight trading.
- Policy-finance / public institutions: cash management and issuance conditions are affected by short-rate and JGB-market liquidity.
Post-YCC Reading Rule
After the BoJ’s March 2024 regime shift away from negative rates and Yield Curve Control, the money market became more useful again as an observable policy-transmission surface. The key check is not only the policy-rate headline; it is whether the actual uncollateralized overnight call rate, transaction volume, reserve environment, and BoJ operations all point in the same direction.
Related
- money-market INDEX
- call-market-structure
- boj-open-market-operations
- boj-monetary-policy
- tokyo-tanshi
- central-tanshi
- ueda-yagi-tanshi
- INDEX
- FinWiki index
Sources
- Bank of Japan: Money Market.
- Bank of Japan: What are market operations?
- Bank of Japan: How have the Bank’s guidelines for market operations changed?
- Bank of Japan: Call Money Market Data.
- Bank of Japan: 2024年度の金融市場調節.
Discovery
Keep reading
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