Japan's Short-Term Money Market Trends
Overview
In August 2026, the Bank of Japan's Financial Markets Department conducted the 17th Tokyo Money Market Survey. The survey reference date was the end of July 2026, and all 381 institutions surveyed responded. Funding balances decreased from the previous year, while investment balances increased. More respondents rated market functioning as “high” than “low,” and the gap widened from the previous year.
Key points
- Funding balances decreased from the previous year, while investment balances increased.
- The share of respondents rating market functioning as “high” exceeded the share rating it as “low,” and the gap widened from the previous year.
- The Bank of Japan's Financial Markets Department said it would use the survey results to understand market trends and support efforts to revitalize financial markets through dialogue with market participants.
Overview
Since 2008, the Bank of Japan's Financial Markets Department has conducted the Tokyo Money Market Survey to understand trading trends in Japan's short-term money market. Initially conducted every two years, it has been held annually since 2013 to provide a more accurate understanding of market trends. The 17th survey was conducted in August 2026, with a reference date of the end of July 2026.
Impact
As of the end of July, a larger share of respondents rated short-term money market functioning as “high” than “low,” and the margin by which “high” exceeded “low” widened from the previous year.
Details
The survey covers Bank of Japan counterparties for its market operations and major participants in the short-term money market. This time, 381 institutions were surveyed, and the response rate was 100%. The results will be used to understand market trends and, together with surveys such as the Bond Market Survey, to gain a comprehensive and multifaceted understanding of financial market conditions and structural changes.
In funding, repo transactions, which account for most of the balance, were flat. Alongside a decline in the outstanding balance of the Bank of Japan's Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth, transactions with the Bank of Japan decreased, resulting in an overall year-on-year decline.
In investment, repo transactions, which account for most of the balance, were flat, while unsecured call transactions and other items increased, resulting in an overall year-on-year increase.
The Bank of Japan's Financial Markets Department said it would continue dialogue with market participants through forums such as the Market Operations Opinion Exchange and the Bond Market Participants Meeting, support stakeholders' efforts to revitalize financial markets, and contribute as much as possible from the central bank's position.