| • | Date and Time: Wednesday, December 6, 2023, 4:30 p.m. - 5:45 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. • It was also proposed that the JGB Market Special Participants carry responsibility for bidding and purchasing the Bonds as with normal JGBs, and that the league table of the top ten Special Participants for the amount of successful bids at the Bond auctions would be published. OPINIONS FROM THE PARTICIPANTS • The participants supported the proposal, considering, among others, investor demand in light of the current interest rate trends and the fact that the Bonds were issued for the first time. 2. Current Trends on JGB Investment and Opinions on the Formulation of the JGB Issuance Plan for FY2024 OPINIONS FROM THE PARTICIPANTS • On 30-Year and 40-Year Bonds, although some comments were made on a potential to reduce the issuance size of 30-Year Bonds given, among others, the progress to meet the regulatory requirements, a dominant opinion was that it was appropriate to maintain the current issuance amount of 30-Year and 40-Year Bonds with a continued level of demand for them. • Regarding 20-Year Bonds, there was a consensus that it was a priority to reduce the issuance size because the demand was declining due to changes in the interest rate environment. Furthermore, many participants stated that the immediate reduction in the issuance within FY2023 was possible. • There were views that the issuance of medium- to long-term bonds could be reduced because 10-Year and 5-Year Bonds would have the same maturities as Japan Climate Transition Bonds, and 5-Year and 2-Year Bonds were susceptible to the impact of the trend of monetary policy. • There were some opinions that it might be possible to reduce the issuance volume of T-Bills because their issuance had increased in response to COVID-19 and it was worth considering issuing 6-month T-Bills only as Financing Bills, which had been the case in the pre-COVID-19 period. • Some participants requested an increase of the tap issuance of JGBs with remaining maturities of mainly 5 to 15.5 years in order to secure liquidity, as the amount outstanding in circulation of some issues was small. 3. Issuance Size and Buy-Back Amount of Inflation-Indexed Bonds in the January-March 2024 quarter DEBT MANAGEMENT OFFICE’S PROPOSAL • It was proposed to set an issuance size per auction (conducted once a quarter) at 250 billion yen and to conduct a Buy-back Auction of 20 billion yen each month, as is currently the case. OPINIONS FROM THE PARTICIPANTS • The participants supported the proposal, saying that it was important to maintain the current balance of the issuance size and the Buy-back amount and strive to foster the Inflation-Indexed Bond market given that the auction results had been weak recently, and the market had been still in the process of expanding its investor base, although the break-even-inflation rate had remained stable recently. 4. Issuance Size of Liquidity Enhancement Auctions in the January-March 2024 quarter DEBT MANAGEMENT OFFICE’S PROPOSAL • Tap issuances of 500 billion yen for JGBs with remaining maturities of 1 to 5 years in odd-numbered months (January and March), 500 billion yen for JGBs with remaining maturities of 5 to 15.5 years monthly, and 500 billion yen for JGBs with remaining maturities of 15.5 to 39 years in even-numbered months (February) were proposed. OPINIONS FROM THE PARTICIPANTS • The participants supported the proposal, saying that the supply-demand balance adjustment among the zones was not necessary although it was true that there were some JGB issues with the tight supply-demand conditions because of the Bank of Japan’s monetary policy, and continuously strong results for the Liquidity Enhancement Auctions for the 5-15.5-year maturity zone had been observed. |