Jin10 reports that the Tokyo Financial Exchange plans to roll out a new futures contract this month tied to the Bank of Japan's overnight unsecured call rate, a product intended to let traders position on rate moves between policy meetings and hedge against rising volatility in rates.

Officials say the exchange's existing three-month TONA futures have not fully met demand, with traders seeking tools that reflect shifting rate expectations tied to each BoJ decision.

A wholesale business department director at the exchange noted that rate volatility has become more active and demand for derivatives is increasing.

Even as the market anticipates ongoing rate hikes from the BoJ, activity in the three-month TONA futures has weakened in recent months, with September volume down nearly 50% from a year earlier.