The Japan Financial Services Agency (FSA) has published the eighth instalment of its “FSA Analytical Notes (2026.3)”, presenting data-driven analysis intended to support a more accurate understanding of individual institutions’ business conditions and the resilience and vulnerabilities of Japan’s financial system. This edition includes a paper on “Verification for a Multifaceted Understanding of the Over-the-Counter Derivatives Trading Market”, which tests methods for assessing OTC derivatives activity using OTC derivatives transaction information, focusing on derivative types and the attributes of trading entities. The analysis found that the number of currency options contracted with operating companies and similar entities increased rapidly during periods of sudden exchange rate changes within the aggregation period, and multi-layered network analysis suggests that financial institutions may play different roles in the OTC derivatives market depending on business type. The FSA indicated it will continue refining analytical methods to deepen its understanding of the OTC derivatives market and will further promote organisational efforts to strengthen data analysis capabilities and develop data as part of a medium- to long-term push to improve data use in financial administration.
Japan Financial Services Agency 2026-03-06
Japan Financial Services Agency releases FSA Analytical Notes on the over-the-counter derivatives trading market
The Japan Financial Services Agency (FSA) released the eighth edition of its "FSA Analytical Notes," focusing on the Over-the-Counter (OTC) derivatives trading market. The analysis highlights a rapid increase in currency options contracted during sudden exchange rate changes and suggests varying roles of financial institutions in the OTC market. The FSA aims to enhance analytical methods and data use in financial administration.