November 2007

TFX O utlook 2008
Japan’s Leading Exchange, Home Market for Euroyen
Since established in 1989, Tokyo Financial Exchange (TFX) is widely known as “Home Market for Euroyen” to awide range of domestic and international investors. The most heavily traded contracts are “Three-monthEuroyen Futures” and “Options on Three-month Euroyen Futures” .
TFX will list Over-night Call Rate Futures (Call Rate Futures) and Spot-Next Repo Rate Futures (Repo RateFutures) on December 3, 2007.
As the leading exchange in Japan, TFX continues to provide various services and products to global investors.

Market Overview of Euroyen
Against the backdrop of Japanese economic recovery, Bank of Japan (BOJ) lifted its ultra-easy monetary policy
in March 2006 and zero interest rate policy in July 2006. These changes boosted TFX Euroyen trading volume
dramatically, as it serves extremely well as a tool of a financial risk control.
The annual trading volume of Euroyen Futures in 2006 was 31,495,084 contracts, a 186% increase fromprevious year. This trend is continuing in 2007.

Euroyen Futures Year-to-year
Comparison

34,339,321( + 34.3 % )3,297,397(-06’ Annual Volume

31,495,084( + 186.9 % )3,976,697( + 9,551.2 % )Monthly Trading Volume
Futures

Options

Open Interest (Month-end)
5,000,000

7.9 % )

Price Movement (1st & 5th Month)
100.00Futures

Options

4,000,000
5,000,000

1st Month

99.80

5th Month

99.60

3,000,000

4,000,000
3,000,000

99.40
99.20

2,000,000

99.00

2,000,000

1,000,000

1,000,0000Year-to-year
Comparison

07’ Jan-Oct Volume

7,000,0006,000,000

Euroyen Options

101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 102005
2006
2007098.80
98.60

101112 1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7 8 9 102005
2006
2007

2005/10/3 2006/2/24 2006/7/18 2006/12/6

2007/5/1 2007/09/19

Edges of TFX, 94% Euroyen ShareTFX holds almost 94% share of Euroyen market worldwide in 2007(Jan-Oct).
As Euroyen market worldwide expands, the share of TFX Euroyen market continues growing.
The edges of TFX market are:- Enhanced trading technology of LIFFE CONNECTTM supporting TFX market- World standardized facilities such as SPAN® and Give-ups that are readily available- Plenty of liquidity provided by TFX members and worldwide investors- Clearing members with good wealth of resources
continued overleaf

November 2007

Introduced Measures in 2007
1. New Products, Over-Night Interest Rate Futures

Introduced Measures in 2007

On December 3, 2007, TFX list the following Over-Night Interest Rate Futures, to meet the needs of both
domestic and overseas investors for Japan’ s financial market:- Over-night Call Rate Futures (Call Rate Futures)- Spot-Next Repo Rate Futures (Repo Rate Futures)
Listing of these new products can enhance yield-curve trades using Euroyen futures on TFX markets,.
TFX will offer a fee holiday on exchange fee of these products until the end of March 2008.

2. Extension of Trading Hours
In February 2007, to respond to the needs of overseas investors, TFX extended trading hours of bothEuroyen Futures and Euroyen Options.
[Present trading hours : Tokyo 8:45 to 20:00, London 23:45 to 11:00, Chicago 17:45 to 5:00 (CST)]

3. Vitalization of Euroyen Options Market- Introduction of Market Maker Program
TFX introduced market maker scheme in January 2007 to add more liquidity and transparency to Euroyen
Options market.
- Reduction of Exchange Fee
In addition, TFX reduced the exchange fee for Euroyen Options by 50% to 50 yen per contract.

New Strategies in 2008
1. New Trading architecture
TMTFX will upgrade trading system powered by LIFFE CONNECT , and renovate the whole system in springof 2008. Speed, capacity and reliability will be significantly enhanced. Round Trip Time for orders will be
under 10 ms.

2. Improvement of Trading Procedure
In order to adopt global standard, TFX will change matching algorithm for Euroyen Futures and Options
from “price-time priority” to “pro-rata” in spring of 2008.

3. New Category of Membership for Direct Market Access
TFX will introduce a Remote Member scheme for overseas investors directly to access to TFX market. TFXplans to provide proximity, collcation, and ASP facilities for a global access.

Tokyo Financial Exchange Inc.

21 Ichiban-cho, Chiyoda-ku, Tokyo 102-0082
Tel: 81-3-3514-2418 Fax: 81-3-3514-2425 URL: http://www.tfx.co.jp/en E-Mail: intlinfo@tfx.co.jp
The copyright of this publication is held by the Tokyo Financial Exchange Inc. (TFX).
This publication has been compiled by TFX for general informational purpose only. Although every attempt has been made to ensure the accuracy of
the information, TFX assumes no responsibility for any errors or omissions. All matters pertaining to rules and procedures herein are made subject toand are superseded by the official rules of TFX. The descriptions in this publication are only for commentary purposes and do not whatsoever intend toprovide advice on investment or asset management. The statements and calculations herein contain examples for illustration purpose and TFX willassume no responsibility for their use. This publication is not intended to provide all information that brokers are required to disclose to theircustomers pursuant to the laws and regulations applicable to the brokers. TFX reserves the right to change the contents of this publication without priornotice.
SPAN® used herein is a registered trademark of Chicago Mercantile Exchange and used herein under license. Chicago Mercantile Exchange assumes
no liability in connection with the use of SPAN® by any person or entity.