Singapore bourse targets global macro funds in Japan rates push

Singapore Exchange will introduce futures on longer-dated Japanese government bonds as trading in the world’s third-biggest debt market heats up.

SGX will make 20-year mini JGB futures available for trading on Jan 26, just a few days after the Bank of Japan sets monetary policy. The contracts will expand SGX’s current suite of offerings, which includes 10-year full-sized and mini JGB futures, as well as Tokyo overnight average rate futures.

“Whether it’s family offices, whether it’s global macro folks, whether it’s the RV guys looking at cash versus future markets, all of those guys would find a big use for what we are putting out there,” said William Chin, SGX’s head of rates, derivatives, in an interview. “We would love to build out a Japan rates curve.”

SGX’s plans come as trading of JGBs surges, boosted by rising inflation and interest rates after years of ultra-low borrowing costs. Daily average turnover in yen over-the-counter rate derivatives rose to US$411 billion last April, up 684 per cent from 2022 levels, according to the Bank for International Settlements’ triennial survey.

In addition to their Japan plans, SGX has also discussed introducing futures for countries including India, Indonesia, Malaysia, the Philippines and Thailand, people familiar with the matter have said. It aims to roll out the contracts in the first half of 2026, potentially as early as the first quarter. BLOOMBERG

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