| • | Date and Time: Wednesday, December 6, 2023, 1:30 p.m. – 2:40 p.m. |
| • | Location: Special Conference Room 1208 at the Central Common Government Offices No.4 |
1. Issuance of Japan Climate Transition Bonds through Auctions in FY2023 DEBT MANAGEMENT OFFICE’S PROPOSAL • It was proposed that the auction for 10-Year and 5-Year Japan Climate Transition Bonds (hereafter referred to as the Bonds in this section) be conducted on February 14, 2024, and February 27, 2024, respectively with an offering amount of approximately 800 billion yen each and that other details of the issuances would be set forth in accordance with “Preliminary Advisory on Japan Climate Transition Bonds,” which was announced on the MOF’s website on November 8, 2023. OPINIONS FROM THE PARTICIPANTS • Many of the participants expressed favorable opinions, opining that they would like to positively consider purchasing the Bonds from the perspectives of reaching the targets for the ESG investments and loans as well as fostering the secondary market, while depending on the maturities of the Bonds and the extent of the interest rate gap between normal JGBs and the Bonds. 2. Current Trends on JGB Investment and Opinions on the Formulation of the JGB Issuance Plan for FY2024 OPINIONS FROM THE PARTICIPANTS • If the total issuance amount of JGBs declines, a reduction in the issuance size of 20-Year Bonds, for which demand from depository financial institutions is decreasing, should be considered as a first option, but it may be possible to reduce each issuance volume of other tenors. • We continue to invest in 40-Year and 30-Year Bonds from the viewpoint of our Asset-Liability Management. Our duration gap between assets and liabilities is narrowing but still exists. • As interest rates have been rising recently, we have been shifting the investment target from 20-Year Bonds to bonds with shorter maturities. • Although demand for 10-Year and 5-Year Bonds may increase given the market conditions, a reduction in their issuance size may be a possible option because they would have the same maturities as Japan Climate Transition Bonds. • The issuance amount of the bonds with shorter maturities, whose issuance amounts had been revised upward in response to fiscal packages to fight against COVID-19, should be decreased. • There is concern that the fiscal discipline of the Japanese government may have loosened since the massive fiscal expenditures in response to COVID-19. Such a spike in fiscal expenditures was met by increasing the issuance volume of T-Bills urgently, however, from the perspective of predictability, it may be appropriate to normalize their issuance from now on. • We hope for an increment in the issuance amount of the Liquidity Enhancement Auctions because of the insufficient liquidity in the medium- and long-term zones. |