| • | Date and Time: Friday, June 20, 2025, 4:00 p.m. – 4:45 p.m. |
| • | Location: Special Conference Room 3 at the Ministry of Finance |
1. Revision of the JGB Issuance Plan for FY2025 DEBT MANAGEMENT OFFICE’S PROPOSAL • JGB Issuance Plan for FY2025 shall be revised as follows. - From July, reduce the issuance amount of 40-Year Bonds and 30-Year Bonds by 100 billion yen per issuance, and reduce the issuance amount of 20-Year Bonds by 200 billion yen per issuance. - The reduced amounts will be offset by increasing the issuance amount of 2-Year Bonds (100 billion yen per issuance) and T-Bills (6-month, 300 billion yen per issuance) starting from October, and by increasing the issuance amount of T-Bills (1-year, 100 billion yen per issuance) starting from January, while also reflecting the upswing in Sales for Household, etc. - Regarding Liquidity Enhancement Auctions, the amount of JGBs with remaining maturities of 15.5 to 39 years will be reduced, and JGBs with remaining maturities of 1 to 5 years will be increased. OPINIONS FROM THE PARTICIPANTS • Regarding the reduction in super long-term bonds, there were opinions that a larger reduction than the proposal would be appropriate for 40-Year and 30-Year Bonds, and that a reduction in on-the-run securities, which are relatively in high demand, should be considered carefully and that a larger reduction in Liquidity Enhancement Auctions would be appropriate. However, most of the participants supported the proposal. • Regarding the increase in other categories to offset the reduction in super long-term bonds, most of the participants supported the proposal. OTHER • Participants expressed understanding of the difficulties in designing a system for Buy-back Auction of the off-the-run securities in the super long-term bonds, but also expressed hope that the MOF would consider this option. On the other hand, some participants expressed opposition to the implementation of such a measure on the grounds that it would undermine market autonomy.The MOF explained that this is an issue that requires careful consideration, including the appropriate approach to government debt management policy, its necessity and appropriateness, and its relationship with Liquidity Enhancement Auctions. • Regarding the recent rise in super long-term interest rates, some participants expressed the view that it was not solely due to supply and demand factors, but also reflected market concerns about fiscal deterioration amid the recovery of price discovery functions in the JGB market. 2. Issuance Size of Liquidity Enhancement Auctions in the July-September 2025 Quarter DEBT MANAGEMENT OFFICE’S PROPOSAL • For JGBs with remaining maturities of 1 to 5 years, the amount will remain unchanged at 500 billion yen in July, and will be increased by 100 billion yen to 600 billion yen in September. For JGBs with remaining maturities of 5 to 15.5 years, issuance will remain at the current level of 650 billion yen. For JGBs with remaining maturities of 15.5 to 39 years, issuance in August will be reduced by 100 billion yen from the current level to 350 billion yen. OPINIONS FROM THE PARTICIPANTS • Most of the participants supported the proposal, saying that while the supply-demand situation for off-the-run securities in JGBs with remaining maturities of 15.5 to 39 years is currently weak, there appears to be room for an increase in JGBs with remaining maturities of 1 to 5 years. Some participants also expressed a desire for a significant reduction in JGBs with remaining maturities of 15.5 to 39 years. 3. Issuance Size and Buy-Back Amount of Inflation-Indexed Bonds in the July-September 2025 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 • While the breakeven inflation rate has been around 150 basis points recently, it has shown significant declines during periods of market volatility caused by U.S. tariff shocks, and instability has been observed. Additionally, considering the continued low liquidity, all participants supported the proposal to maintain the current handling, stating that it is appropriate. |