--- title: "TORF (Tokyo Term Risk Free Rate)" aliases: - "money-market/japan-torf-term-risk-free-rate" - "japan-torf-term-risk-free-rate" - "TORF" - "Tokyo Term Risk Free Rate" - "Term TONA" - "東京ターム物リスク・フリー・レート" - "ターム物RFR" domain: "money-market" created: 2026-06-03 last_updated: 2026-06-03 last_tended: 2026-06-03 review_by: 2026-12-03 confidence: likely tags: [money-market, TORF, benchmark, RFR, TONA, reference-rate, term-rate] status: active sources: - "https://corporate.quick.co.jp/en/torf/" - "https://www.torf.co.jp/en/designated/" - "https://www.boj.or.jp/en/paym/market/jpy_cmte/index.htm" - "https://www.fsa.go.jp/en/policy/libor/index.html" - "https://www.boj.or.jp/en/statistics/market/short/mutan/index.htm" --- # TORF (Tokyo Term Risk Free Rate) ## Wiki route This entry sits under [[money-market/INDEX|money-market index]]. Read it against [[money-market/japan-tibor-benchmark-rate|TIBOR]] for the quote-based credit-sensitive contrast, [[money-market/japan-money-market-benchmark-reform-tona|Japan money-market benchmark reform (TONA)]] for how the JPY risk-free-rate complex was built, and [[derivatives/ois-tona-curve|the OIS TONA curve]] for the derivative inputs TORF is computed from. The supervisory anchor is [[financial-regulators/fsa|the FSA]]. ## TL;DR TORF (Tokyo Term Risk Free Rate) is a **forward-looking term risk-free rate** for the Japanese yen, calculated and published each business day by **QUICK Benchmarks Inc. (QBS)**. It is derived from the data of yen interest-rate derivatives (OIS) whose underlying is the uncollateralized overnight call rate, i.e. [[derivatives/ois-tona-curve|TONA]]. In effect, TORF turns the *overnight, backward-looking* TONA into a *term, forward-looking* fix that borrowers can see at the start of an interest period. TORF is one of the JPY successor rates to **JPY LIBOR**, whose publication ceased at end-2021. It sits in Japan's post-LIBOR multi-rate world as a third reference type: - **[[money-market/japan-tibor-benchmark-rate|TIBOR]]** — term, quote-based, credit-sensitive. - **[[derivatives/ois-tona-curve|TONA]]** — overnight, transaction-based, near risk-free. - **TORF** — term, risk-free, *derived* from TONA-referencing OIS data. For FinWiki, TORF is the "term version of the risk-free rate": it gives the forward-looking convenience of a term fix without the bank-credit component embedded in TIBOR. ## What TORF Measures | Element | Reading | |---|---| | Type | Forward-looking term risk-free reference rate. | | Administrator | QUICK Benchmarks Inc. (QBS), established by QUICK Corp. | | Underlying | Yen OIS (overnight index swap) transaction data referencing the uncollateralized overnight call rate (TONA). | | Credit content | Near risk-free — it carries almost none of the bank-credit / term premium that TIBOR embeds. | | Direction | Forward-looking: the term rate is known at the *start* of the interest period. | | Regulatory status | TORF is designated a "Specified Financial Benchmark" and QBS a "Specified Financial Benchmark Administrator" under the Financial Instruments and Exchange Act, supervised by the [[financial-regulators/fsa|FSA]]. | | Currency | Japanese yen. | Because TORF is built from OIS data rather than from reference-bank judgement (TIBOR) or from a pool of overnight cash trades (TONA), it occupies a distinct methodological niche: a *term* rate that still inherits the *risk-free* character of the overnight rate beneath it. ## TORF vs TONA vs TIBOR | Property | TORF | TONA | TIBOR | |---|---|---|---| | Nature | Term, forward-looking. | Overnight, backward-looking. | Term, forward-looking. | | Basis | Derived from TONA-referencing OIS data. | Volume-weighted average of actual uncollateralized overnight call trades. | Reference-bank quotes for unsecured term funding. | | Credit content | Near risk-free. | Near risk-free. | Embeds bank credit / term premium. | | Administrator | QUICK Benchmarks Inc. | [[financial-regulators/boj-monetary-policy|Bank of Japan]]. | JBA TIBOR Administration (JBATA). | | Typical use | Loans / products wanting a *forward-looking risk-free* term fix. | OIS, discounting, compounded-in-arrears products. | Term loans / bonds wanting a credit-sensitive term fix. | The three are complementary, not interchangeable. The spread between term TORF and term [[money-market/japan-tibor-benchmark-rate|TIBOR]] over the same tenor is, in effect, a market read on the bank-credit / term-premium component — because the two differ mainly in whether bank credit is embedded. ## Why a Term RFR Was Needed Compounded-in-arrears TONA is operationally awkward for some borrowers: the exact interest amount is only known near the *end* of the period, after the daily overnight rates are observed and compounded. The global benchmark transition therefore produced **term risk-free rates** in several currencies so that cash-market users who need certainty at the start of a period — for invoicing, budgeting, or systems that expect a known term rate — can still avoid a credit-sensitive IBOR. TORF is the JPY answer to that need. It is one of several approaches the BoJ-convened **Cross-Industry Committee on Japanese Yen Interest Rate Benchmarks** identified for moving JPY cash products off LIBOR, alongside TONA compounding (in arrears) and the retained TIBOR. ## Where TORF Fits in Cash Products - **Loans**: bilateral and some syndicated JPY loans that want a forward-looking, risk-free term reference can reference TORF instead of TIBOR (credit-sensitive) or compounded TONA (in arrears). - **Bonds / FRNs**: instruments needing a known term coupon at period start. - **Operational convenience**: TORF suits borrowers and systems that require the rate up front; in-arrears TONA suits those comfortable computing interest after the fact. For discounting and most cleared derivatives, the JPY market still discounts on [[derivatives/ois-tona-curve|TONA-OIS]]; TORF is primarily a *cash-product term-fixing* benchmark rather than a discounting curve. ## Governance Context TORF's designation under the FIEA benchmark-regulation framework places it within the same IOSCO-aligned governance regime that reshaped [[money-market/japan-tibor-benchmark-rate|TIBOR]]: - A designated administrator (QBS) with a published methodology, operational rules, and code of conduct. - FSA supervision as a Specified Financial Benchmark. - Coordination with the broader [[money-market/japan-money-market-benchmark-reform-tona|JPY benchmark-reform effort]] run through the BoJ-convened committee. This governance is what lets TORF function as a usable reference rate rather than an unsupervised data product. ## Reading Checklist 1. Treat TORF as *term and risk-free* — it is neither the overnight TONA nor the credit-sensitive TIBOR. 2. Remember TORF is *derived from* TONA-referencing OIS data, so it inherits TONA's risk-free character but expresses it as a forward-looking term rate. 3. Confirm the tenor when a contract references TORF. 4. Do not assume TORF is a discounting curve; collateralized JPY trades still discount on [[derivatives/ois-tona-curve|TONA-OIS]]. 5. Read the TORF-vs-TIBOR spread as a credit / term-premium signal, like the [[money-market/japan-tibor-benchmark-rate|TIBOR]]-vs-TONA basis. ## JapanFG Relevance - [[financial-regulators/fsa|FSA]] supervises TORF as a Specified Financial Benchmark and its administrator as a Specified Financial Benchmark Administrator. - [[financial-regulators/boj-monetary-policy|BoJ]] administers TONA, the overnight rate underneath TORF, and convened the cross-industry benchmark-reform committee. - [[financial-regulators/zenginkyo|Japanese Bankers Association (Zenginkyō)]] hosts JBATA, administrator of the contrasting TIBOR benchmark. - Megabanks [[megabanks/mufg]], [[megabanks/smfg]], and [[megabanks/mizuho-fg]] are the major JPY lenders choosing between TORF, TIBOR, and compounded TONA for loan documentation. ## Boundary Cases - **TORF vs TONA**: term forward-looking vs overnight backward-looking; TORF is derived from TONA-referencing OIS data. - **TORF vs TIBOR**: both term and forward-looking, but TORF is risk-free while TIBOR embeds bank credit. - **TORF vs LIBOR**: TORF is a JPY LIBOR successor term rate, but risk-free and OIS-derived rather than a quote-based IBOR. - **TORF vs a discounting curve**: TORF is a cash-product term-fixing benchmark, not the [[derivatives/ois-tona-curve|TONA-OIS discounting curve]]. ## Related - [[money-market/INDEX|money-market INDEX]] - [[money-market/japan-money-market]] - [[money-market/japan-tibor-benchmark-rate]] - [[money-market/japan-money-market-benchmark-reform-tona]] - [[money-market/call-market-structure]] - [[derivatives/ois-tona-curve]] - [[derivatives/japan-irs-market]] - [[derivatives/japan-interest-rate-derivatives-overview]] - [[financial-regulators/fsa]] - [[financial-regulators/boj-monetary-policy]] - [[financial-regulators/zenginkyo]] - [[megabanks/mufg]] - [[megabanks/smfg]] - [[megabanks/mizuho-fg]] - [[INDEX|FinWiki index]] ## Sources - QUICK Money World / QUICK Corp.: TORF (Tokyo Term Risk Free Rate) overview, including derivation from TONA-referencing OIS data and successor-to-LIBOR positioning. - QUICK Benchmarks Inc. (torf.co.jp): designation of TORF as a Specified Financial Benchmark and QBS as a Specified Financial Benchmark Administrator. - Bank of Japan: Cross-Industry Committee on Japanese Yen Interest Rate Benchmarks surface. - Financial Services Agency: LIBOR-transition / benchmark-reform information surface. - Bank of Japan: Call Money Market Data (TONA / uncollateralized overnight call rate underlying TORF).