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Username: LuckyMan

Rating:
Guru Stars

Asked to: Jun Wang

Date Created: 29 Dec 2018
Category 28
Tag Financial
Question What is Gen-Saki?
Advice from Guru
Hello LuckyMan,

Gen-saki is a secondary bond market in Japan, also known as a repo market for its similarity to repurchase agreements. Gen-saki trading involves the buying or selling of bonds with a deal to buy or sell them back after a specified period.

Gen-saki translated into English means “present” (gen) and “future” (saki). Gen-saki is used for the purchase and resale of medium-term and long-term corporate and government bonds. The gen-saki market evolved in the 1950s because there was no secondary market in Japan for treasury securities issued by the Bank of Japan. Gen-saki is open to corporations and financial institutions. Until 1979 it was also open to foreign investors in 1979. Gen-saki transactions are available for any maturity dates up to one year, but most agreements are within three months or less. When setting the gen-saki rate, the yen London interbank offered rate (LIBOR) is often the basis, because it accurately reflects the deposit market rate.

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