| • | Date and Time: Wednesday, March 13, 2024, 4:00 p.m. – 5:10 p.m. |
| • | Location: Special Conference Room 3 at the Ministry of Finance |
1. Reopening Rules of Fixed-Rate Coupon-Bearing Bonds in FY2024 DEBT MANAGEMENT OFFICE’S PROPOSAL • Regarding 5-Year Bonds, it was proposed to maintain the current practice of reopening them one and two months after the original issuance, if the redemption date and the coupon rate of a new issue are the same as those of the original issue (redemption date is renewed every three months). • Regarding 10-Year Bonds, it was proposed to maintain the current practice of reopening them one and two months after the original issuance, leading to four issues per year (redemption date is renewed every three months), unless a different coupon rate is desirable due to a wide interest rate fluctuation (approximately over ±0.30% from the original coupon rate). • Regarding 20-Year and 30-Year Bonds, it was proposed to maintain the current practice of “reopening in principle”, namely reopening them one and two months after the original issuance, leading to four issues per year (redemption date is renewed every three months). • Regarding 40-Year Bonds, it was proposed to maintain the current practice of “reopening in principle”, namely reopening them throughout a fiscal year (five reopening issuances every two months after the original issuance with redemption date being renewed once a year). OPINIONS FROM THE PARTICIPANTS • Many of the participants supported the proposal about the reopening rule of 5-Year Bonds, saying that a change in the current reopening rule of those bonds would be harmful in light of the investor demand for newly issued 5-Year Bonds, although some of the participants expressed their preference for reopening them as four issues per year (adopting “reopening in principle” rule) in order to improve liquidity. • Most of the participants supported the proposal concerning the reopening rule of 10-Year Bonds, although some of the participants opined that 10-Year Bonds should be reopened as four issues per year (adopting “reopening in principle” rule) because ensuring liquidity was important from the viewpoint of market making. • The participants supported the proposals as to the reopening rules of 20-Year, 30-Year, and 40-Year Bonds. 2. Auction Methods of Fixed-Rate Coupon-Bearing Bonds in FY2024 DEBT MANAGEMENT OFFICE’S PROPOSAL • Regarding 40-Year Bonds, it was proposed to maintain the current practice of Dutch-style-yield-competitive auction. • Regarding 2-Year, 5-Year, 10-Year, 20-Year, and 30-Year Bonds, it was proposed to maintain the current practice of price-competitive auction in the multiple price method. • It was proposed that the maximum amount of issuance through Non-Price Competitive Auction I be raised from 20% of the planned issuance amount of the JGB to 25%. OPINIONS FROM THE PARTICIPANTS • Most of the participants supported the proposal regarding the auction method of 40-Year Bonds, because it was not expected that more investors would participate in the JGB market even if the auction method was changed to the multiple price method, while some of the participants commented that the change to the multiple price method would be desirable given the matureness of the market. • Most of the participants supported the proposals about the auction methods of 2-Year, 5-Year, 10-Year, 20-Year, and 30-Year Bonds, saying that the recent weak results of mainly 20-Year and 30-Year Bond auctions were only temporary and that they did not give enough reason to change the current auction methods. In contrast, some of the participants stated that the Dutch method should be used as in the U.S. • Most of the participants supported the proposal to raise the maximum amount of issuance through Non-Price Competitive Auction I. 3. Issuance Size and Buy-Back Amount of Inflation-Indexed Bonds in the April-June 2024 quarter and others 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. • It was proposed to maintain the current practice of “reopening in principle”, namely reopening Inflation-Indexed Bonds throughout a fiscal year (three reopening issuances every three months after the original issuance with redemption date being renewed once a year), and to conduct Dutch-style-price-competitive auction. OPINIONS FROM THE PARTICIPANTS • The participants supported all the proposals, saying that they preferred to maintain the status quo, as the investor base hadn’t yet been sufficiently expanded. 4. Issuance Size of Liquidity Enhancement Auctions in the April-June 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 (May), 600 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 (April and June) were proposed. OPINIONS FROM THE PARTICIPANTS • The participants supported the proposal, saying that it was necessary to ensure liquidity by increasing the issuance amount to 600 billion yen in the 5-15.5-year maturity zone because the amount outstanding in circulation of JGBs in this zone had been low due to the Bank of Japan’s outright purchases. 5. Issuance of Japan Climate Transition Bonds through Auctions in FY2024 DEBT MANAGEMENT OFFICE’S PROPOSAL • The auctions for 10-Year Japan Climate Transition Bonds (hereafter referred to as the Bonds in this section) in May and October 2024 and the auctions for 5-Year Bonds in July 2024 and January 2025, with an offering amount of approximately 350 billion yen each were proposed. It was also proposed to adopt “reopening in principle” rule, namely reopening the Bonds throughout a fiscal year (e.g., reopening issuance at the 10-Year auction in October 2024 and the 5-Year auction in January 2025 for the above case). OPINIONS FROM THE PARTICIPANTS • The participants supported the proposal to issue the Bonds four times in FY2024, which would make it easier for investors to purchase them. There were opinions about the BOJ’s outright purchases of the Bonds. |