| • | Date and Time: Friday, March 21, 2025, 4:00 p.m. – 5:00 p.m. |
| • | Location: Special Conference Room 3 at the Ministry of Finance |
1. Reopening Rules of Fixed-Rate Coupon-Bearing Bonds in FY2025 DEBT MANAGEMENT OFFICE’S PROPOSAL • Regarding 5-Year Bonds, it was proposed to issue four issues in FY2025 unless the gap between the coupon rate of the issue with the same maturity and the market interest rate on the auction day was more than 0.10%. • Regarding Japan Climate Transition Bonds, it was proposed to issue them as newly issued bonds(two issues per year). • Regarding 10-Year Bonds, it was proposed to issue four issues in FY2025 unless the gap between the coupon rate of the issue with the same maturity and the market interest rate on the auction day was 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, it was proposed to maintain the current practice of “reopening in principle”, namely reopening them throughout a fiscal year. OPINIONS FROM THE PARTICIPANTS • Regarding the reopening rule of 5-Year Bonds, most participants supported the proposal from the perspective of improving liquidity. Some participants didn't objected to the proposal, saying that although the current reopening rule was preferable given factors such as investor demand for newly issued bonds, the proposal leaved some room for newly issued bonds to be issued, so they do not oppose it. • Regarding the reopening rule of Japan Climate Transition Bonds, participants supported the proposal from the perspective of prioritizing investor demand for new bonds. • Most of the participants supported the proposal concerning the reopening rule of 10-Year Bonds, although some of the participants stated 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 FY2025 DEBT MANAGEMENT OFFICE’S PROPOSAL • Regarding 40-Year Bonds and Japan Climate Transition 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. OPINIONS FROM THE PARTICIPANTS • Most of the participants supported the proposal regarding the auction method of 40-Year Bonds and Japan Climate Transition Bonds in terms of the instability of the auction result, 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. In contrast, some of the participants stated that the Dutch-style should be used as in the U.S. 3. Issuance Size and Buy-Back Amount of Inflation-Indexed Bonds in the April-June 2025 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 breakeven inflation rate has been stable, but in light of the weak results of the auction in Feburary and the continued low liquidity, all participants supported the proposal to maintain the current treatment. Several participants also expressed the view that there was room to discuss the resumption of Non-Price Competetitive Auction Ⅱ in the future. 4. Issuance Size of Liquidity Enhancement Auctions in the April-June 2025 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), 650 billion yen for JGBs with remaining maturities of 5 to 15.5 years monthly, and 450 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 • Most participants supported the proposal, saying that it was appropriate to handle the issueance in line with the issuance plan, but a few participants expressed the view that the amount of issuance for JGBs with remaining maturities of 15.5 to 39 years, for which demand was confirmed, should be increased, and that the amount of issuance for JGBs with remaining maturities of 5 to 15.5 years, for which liquidity was improving, should be reduced. |