TFX Three-month TONA Futures

Exchange-traded access to Japan's benchmark risk-free rate.

Three-month TONA Futures are listed on the Tokyo Financial Exchange (TFX) and are based on the compounded daily Tokyo Overnight Average Rate (TONA) — the JPY risk-free rate administered and published by the Bank of Japan. Following the cessation of JPY LIBOR publication at the end of December 2021, TONA has become the primary benchmark for JPY interest rate markets, and these futures provide an exchange-traded venue for price discovery and risk management.

Each contract's underlying asset is the compounded daily TONA over a three-month Reference Quarter, aligned with the standard quarterly interest exchange convention used in over-the-counter (OTC) JPY interest rate swaps (IRS). This alignment makes Three-month TONA Futures an effective substitute or hedging tool for OTC IRS transactions.

With cash settlement, SPAN® margining, and support for calendar spread trading, block trades, and give-up trades, these contracts are designed to meet the operational and risk management requirements of institutional market participants.

Key Benefits

• Risk-Free Rate Benchmark
  • Based on TONA — Japan's designated RFR administered by the Bank of Japan and the successor to JPY LIBOR — providing a credible and widely recognised interest rate benchmark.
     
• Effective Hedging of JPY Interest Rate Swaps
  • The product's quarterly Reference Quarter structure mirrors the interest exchange conventions of OTC JPY IRS, making it a precise hedging and substitution instrument for swap portfolios.
     
• Transparent Price Discovery
  • Exchange-traded on TFX with an open order book and price/time priority matching, providing reliable market signals on future JPY short-term interest rates.
     
• Counterparty Risk Mitigation
  • As a centrally cleared exchange-traded product, Three-month TONA Futures eliminate bilateral counterparty credit risk associated with OTC IRS transactions.
     
• Operational Efficiency
  • Standardised contracts and exchange clearing reduce the operational burden and documentation requirements compared with OTC derivatives, streamlining risk management workflows.
     
• Flexible Trading Options
  • Supports calendar spread trading, implied-in and implied-out functionality, block trades (minimum 1 contract), and give-up trades — accommodating a wide range of trading and execution strategies.
     

Contract Specifications

Source: Tokyo Financial Exchange (TFX)

This advertisement has not been reviewed by the Monetary Authority of Singapore.
 

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