Weather derivatives market is rapidly expanding in Japan, but it still remains a substitute for insurance and further contribution by all participants is required to form a commodity market. Natsource Japan is one of the leaders for such market evolution and its effort is distinguished from the others by its introduction of a new weather index, Japan Weather Derivatives Index (JWDI). It is designed to help market participants design derivative products by collecting and summarizing future projections of four types of weather data: heating degree days (HDD), cooling degree days (CDD), average temperature and precipitation days. Projections are provided to Natsource Japan by five leading companies, namely UFJ Bank (formerly Sanwa Bank), Bank of Tokyo-Mitsubishi, Mizuho Corporate Bank (formerly Industrial Bank of Japan), Mitsui Sumitomo Insurance and Sompo Japan Insurance (formerly Yasuda Fire & Marine Insurance). The result is available at Natsource Japan’s web site and renewed twice a month. Japan Weather Association also contributes its data for past weather record to enrich the contents of the web site. Beside JWDI, Natsource Japan launched the Japan Weather Exchange (JWX), the weather derivatives interdealer-trading market.

The purpose of launch of JWX is to help the market participants’ hedge weather risks more efficiently as well as the current Japanese market shifts in style to a clear cut, dealer oriented market. Such market enable the dealers to execute swap contracts more easily by introducing small sized, standardized products. To join or to know more about JWX, please contact Natsource Japan.

Contact: 

Satoshi Hasegawa, Manager at 81 3 5200 1710 or hasegawa@natsourcejapan.com