26 September 2017
Reporter: Jenna Lomax

Pilot repo survey reveals Japan as regional activity centre

A pilot survey of the Asia Pacific repo landscape by the International Capital Market Association (ICMA) found that Japan is the most active regional repo market and that Japanese government bonds dominate collateral usage.

ICMA’s European Repo and Collateral Council (ERCC), in partnership with the Asia Securities Industry & Financial Markets Association (ASIFMA) Secured Funding Markets Committee, conducted the survey on 7 December 2016.

The main currency traded in Asia Pacific repo market was Japanese yen, of which the reporting banks were net lenders. There was also some cross-currency repo with US dollars and Japanese collateral.

The data complemented the findings gathered from a larger December 2016 ICMA European survey that also detailed Asian repo activities.

When observing the different types of transactional executions, the report on the survey noted very little electronic trading.

Most transactions were executed directly on the telephone and electronic messaging systems.

Martin Scheck, chief executive of ICMA, said: “Our intention is that this first Asia Pacific survey will be the precursor of a similarly authoritative report for the fast-growing repo markets of the region.”

Mark Austen, CEO of ASIFMA, added: “We believe that the time is ripe for a market-led initiative to offer greater transparency of the Asian market and that this information will help catalyse the further development of the market by promoting wider awareness and better understanding.”

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