Key Points of the 99th Meeting of JGB Investors

1. Reopening Rules of Coupon-Bearing Bonds in FY2026
DEBT MANAGEMENT OFFICE’S PROPOSAL

・Regarding 5-year-bonds, it was proposed to maintain four issues in FY2026 unless the gap between the coupon rate of the issue with the same maturity and the market interest rate on the auction day is more than 0.10%.

・Regarding 10-year-bonds, it was proposed to maintain four issues in FY2026 unless the gap between the coupon rate of the issue with the same maturity and the market interest rate on the auction day is more than 0.30%.

・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 and Inflation-Indexed Bonds, it was proposed to maintain the current practice of "reopening in principle", namely reopening them throughout a fiscal year.

・Regarding Japan Climate Transition Bonds, it was proposed to maintain the current practice issuing as newly issued bonds (two issues per year).

OPINIONS FROM THE PARTICIPANTS
・Most of the participants supported the proposal about the reopening rule of each bonds, while some participants expressed the view that there should be more reopen issues for 5-year-bonds, 30-year-bonds and Japan Climate Transition Bonds in order to improve the market liquidity.

DEBT MANAGEMENT OFFICE’S PROPOSAL

・It was proposed to remain an issuance size per auction (conducted once a quarter) at 250 billion yen. It was also proposed to decrease the buy-back amount from 20 billion yen to 15 billion yen per auction, and to change the frequency of buy-back auction from monthly to twice a quarter.

OPINIONS FROM THE PARTICIPANTS
・Although most of the participants supported the proposal, some participants suggested maintaining the current practice or increasing both issuance size and buy-back amount due to the lack of market liquidity. Given the growing importance of BEI (break-even inflation rate), there were also some expectations for the expansion of the investor base in the furture.

DEBT MANAGEMENT OFFICE'S PROPOSAL
・For the liquidity enhancement auctions for the JGBs with remaining maturities of 1 to 5 years (issued in odd-numbered months), to maintain the issuance size unchanged at 700 billion yen.
For the liquidity enhancement auctions for the JGBs with remaining maturities of 5 to 15.5 years (issued every month), to change the range of maturities to 5 to 11 years (issued every month), and to maintain the issuance size unchanged at 650 billion yen.

For the liquidity enhancement auctions for the JGBs with remaining maturities of 15.5 to 39 years (issued in even-numbered months), to change the range of maturities to 11 to 39 years (issued in even-numbered months), maintain the issuance size unchanged at 250 billion yen.

OPINIONS FROM THE PARTICIPANTS

・Most of the participants supported the proposal to change the range of remaining maturities and maintain the current issuanse size of each zone. Also, some participants expressed that the issuanse size should be flexibly adjusted even after April-June quarter considering supply-demand situation.