January 14, 2014 / 4:15 AM / 4 years ago

BOJ weighs extending operating hours of its settlement system

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TOKYO, Jan 14 (Reuters) - The Bank of Japan is considering extending the operating hours of its key settlement system by two hours from autumn next year to facilitate yen transactions in Asia and other time zones, sources familiar with the matter said on Tuesday.

The change is likely to take place when the central bank renews its settlement system, which commercial banks use to settle requests from customers to transfer money to other banks, by early 2016.

The BOJ has been negotiating with private financial institutions since September on extending the system's operating hours to meet growing needs from Japanese companies conducting business globally.

The central bank is considering changing the cut-off time of the system to 9 p.m. Tokyo time (1200GMT) from the current 7 p.m. so that same-day settlement can be made possible for transactions in many Asian countries, the sources said on condition of anonymity, confirming a report by the Nikkei daily on Tuesday.

The extension will also cover early London market hours and make it easier for Japanese companies to procure foreign currency-denominated funds using Japanese government bonds (JGB) holdings as collateral, the sources said.

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