(provisional translation)

November 5, 1999
Ministry of Finance

Measures for massive outflow of postal savings on maturity

 

  1. The Ministry of Finance (MOF) has been conducting consultations with the Bank of Japan (BOJ) on the Trust Fund Bureau(TFB)’s financing at the time of massive outflow of postal savings on maturity in FY 2000 and FY 2001, and has reached a basic agreement to deal with the matter as described in the attached paper.

  2. 2The basic idea on the measures is that, with regard to necessary funds for the TFB, in principle, it should raise such funds from the financial market by itself, and that the BOJ would provide temporary liquidity to complement them.

  3.  With regard to the measures, the BOJ announces that, keeping in mind the flow of the public finance such as the coming outflow of postal savings and the implementation of fund raising from the financial market by the TFB, the BOJ intends to conduct appropriate monetary adjustment in consideration of financial market situations.
    With regard to the influence of the outflow of postal savings on the financial market, we intend to take appropriate actions in close consultation with the BOJ.

(attachment)

Financing of the Trust Fund Bureau
at the time of massive outflow of postal savings on maturity

 

    The Ministry of Finance (MOF) and the Bank of Japan (BOJ) have agreed to take the following measures concerning the financing of the Trust Fund Bureau (TFB) at the time of massive outflow of postal savings on maturity in FY 2000 and FY 2001.

(1) As measures for the financing at the time of outflow of postal savings (FY 2000 and FY 2001), the TFB will sell its JGBs under repurchase agreements (“uri-gensaki” transactions) in the financial market.

(2)
In the TFB’s uri-gensaki transactions on the fainancial market, if the auction comes short of the required amount of funds, or when the required amount of funds for the TFB is more than the average amount per auction, the BOJ will provide the necessary funds temporarily as the counterpart of the TFB’s uri-gensaki transactions (within three months).

(3)
The TFB will gradually increase the outstanding balance of uri-gensaki transactions on the financial market until the total required amount of funds is secured. In the process, the BOJ, if it deems necessary, will accept, within a fixed amount, the rollover of uri-gensaki transaction for a period exceeding three months.

(4)
The yield on the uri-gensaki transaction that the TFB conducts with the BOJ will be set in consideration of the actual market situations and other factors.

(5)


The MOF and the BOJ will keep close consultations in implementing the above and, if necessary in case such as a sudden fluctuation in financial market situations, will hold further consultations and take appropriate actions.

 [FILP]

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