Introduction to Our Businesses

Interbank Division

The call money market was originally established and developed as a means for banks to adjust their liquidity with each other. It is the oldest money market in Japan. The call market is so named because funds are returned whenever the lender “calls”. It is used for lending and borrowing with the term of less than one year.

Uncollateralized call

This fund transaction that does not require any collaterals was introduced in 1985 with the deregulation and internationalization of the money market. The weighted-average interest rate on overnight uncollateralized call transactions, or “TONA” (dubbed from “Tokyo Overnight Average Rate”) was the main operating target for the Bank of Japan’s money market operations prior to the current monetary policy, “Quantitative and Qualitative Monetary Easing with a Negative Interest Rate.” Since TONA has been identified as the JPY risk-free rate, it has become increasingly important as an indicator of short-term interest rates.

Collateralized call

Collateralized calls are highly secure collateralized fund transactions invented by Kaname Ueda, the Company’s founder. The transaction types are broadly separated into two types: “dealing method” (the tanshi company acts as the dealer in the transaction) and “broking method” (the tanshi company acts as a broker in the transaction).

Intraday call

Intraday call transactions are concluded in the same day. They are primarily used to balance shortage or surplus of funds due to timing differences in fund inflows and outflows during a day and settlements by private-sector settlements systems, such as Foreign Exchange Yen Clearing System (FXYCS) and Zengin-Net.

Interbank Division

Tel: +81(3)-3270-1711

Financial Markets Division

Treasury Discount Bills

Treasury Discount Bills (“T-bills” for short) are government bonds with maturities of one year or less. T-bills are issued at a price that has been discounted by the amount of interest payable until maturity from the face value. There are currently four types of maturities: two-month, three-month, six-month, and one-year. Prior to February 2009, both T-bills and Financing Bills (F-bills) were issued, but subsequently both instruments were unified under the term T-bill while their positioning under the Public Finance Act was not changed to facilitate flexible procurement of short-term funds.

Ueda Yagi Tanshi participates directly in T-bill auctions and is also a qualified counterparty in the Bank of Japan’s “Outright Purchase/Sale of Treasury Discount Bills”. In addition, we conduct proprietary trading, including outright transactions and repos.

Financial Markets Division

Tel: +81(3)-3279-3240

Capital Markets Division

JGB Repo and Lending Transactions

The Capital Markets Division handles bond repurchase agreements (gensaki (repo) transactions/cash collateralized bond lending transactions), in which funds and government bonds are exchanged for a certain period of time. In addition to funding and short-covering of JGBs and raising and managing funds collateralized by JGBs, transactions are sometimes conducted for arbitrage using the three-tier structure of current accounts at the Bank of Japan.

Cash collateralized JGB lending

債券レポ

Gensaki (repo) transactions

債券現先

A bond repurchase agreement must be concluded to initiate a bond repurchase transaction. For more details, please contact us at the following telephone number.

Capital Markets Division

Tel: +81(3)-3270-2541

Open Markets Division (CP & NCD Trading)

Commercial Paper (CP)

CP is an efficient method for raising short-term funds for the issuing corporations and is also an important vehicle for investors to manage short-term funds. Japan’s CP market was established in November 1987 and has become even more convenient with the build-out of the market infrastructure, including the digitalization of CP from March 2003. Ueda Yagi Tanshi leverages its neutral standing as a CP dealer to address the needs of both issuers and investors. In addition, we participate in the market as a qualified counterparty of the Bank of Japan in its money market operations that use CP to implement monetary policy.

Negotiable Certificates of Deposit (NCDs)

Negotiable certificates of deposits (NCDs) are certificates of deposit that can be traded in a highly liquid secondary market. Since city banks first issued them in May 1979, NCDs have been an important source of short-term funding for the issuing banks. Ueda Yagi Tanshi underwrites NCDs and brokers their resale.

Open Markets Division

Tel: +81(3)-3279-3271

Securities Finance Division

Equity Repo Transactions

Stock lending transactions with cash collateral (commonly known as equity repos) involve the lending of stock certificates with cash as collateral. They are open market products that business corporations can also access to raise funds. Since the client can remain the shareholder of record, equity repos may be used as a fundraising method using cross-held shares. Ueda Yagi Tanshi will continue to strengthen its infrastructure to address the needs of its clients while contributing to the expansion of the equity repo market.

Transaction Chart

株券レポ

Other than above, Securities Finance Division deals collateral swap transactions and municipal bonds etc.

Securities Finance Division

Tel: +81(3)-3231-8585

Operations Division

The Operations Division carries out various clerical tasks (including the settlement of accounts) with counterparties regarding transactions made by markets divisions (called post-trade business.) Most of our major settlement operations are carried out in the cloud, and by connecting them directly to central settlement institutions such as the BOJ-NET (Bank of Japan Financial Network System), we have established a system that enables us to execute huge amounts of settlements safely, reliably, and quickly.

Support for markets divisions is also an important role. In the development of new products, which require a wide range of knowledge on domestic and overseas laws, systems, and accounting and others, we work in cooperation with markets divisions.

In addition, by utilizing the business knowledge, know-how, and business base that we have cultivated, we are also engaged in the sole agency business for clearing JGB over-the-counter transactions in Japan. Through these various activities, the Operations Division is endeavoring to contribute to the improvement of liquidity and stability in domestic financial markets.

Operations Division

Tel: +81(3)-3270-1473

Transactions with the Bank of Japan

Ueda Yagi Tanshi is a qualified counterparty for many of the Bank of Japan’s market operations and thus contributes to the Bank of Japan’s monetary policy implementation via the function of the market infrastructure. The following divisions are counterparties in the Bank of Japan’s operations: the Interbank Division for “Funds-Supplying Operations against Pooled Collateral”, “Sale of Bills” and “US Dollar Funds-Supplying Operations against Pooled Collateral”; the Financial Markets Division for “Outright Purchase/Sale of Treasury Discount Bills” and “Outright Purchases of Japanese Government Bonds”; the Capital Markets Division for “Purchase/Sale of Japanese Government Securities with Repurchase Agreements” and “Securities Lending Facility”; and the Open Markets Division for “Outright Purchases of CP” and “Purchases of CP with Repurchase Agreements”.