CME Group Increases Futures Margin Requirements on Yen Contracts

CME Group Inc., the world’s largest futures exchange, raised margin requirements on its yen contracts as part of its normal review process of changes in volatility to ensure adequate collateral coverage.

Initial margin for Japanese yen futures was raised to $2,860 for speculators, from $2,475, and increased to $2,600 for hedgers and CME members, from $2,250. Maintenance margin was boosted for both speculators and hedgers to $2,600, from $2,250, Chicago-based CME Group said in a notice on its website. The changes take effect at the close of business today, it said.

In the spot market, the Japanese currency climbed 1 percent today to 92.68 per dollar, paring its slide this year to 6.4 percent.

The CME’s yen futures are valued in dollar-per-yen terms as compared with the cash market, which is yen-per-dollar. The future has an underlying contract size of 12.5 million yen ($134,815).

Initial margin is the minimum amount of cash or eligible securities investors must deposit to cover the risk of default.

The CME is adjusting margin requirements, including both increases and decreases, on 18 different foreign-exchange contracts from developed nation as well as emerging-nation currencies.