What’s New: The Meetings of JGB Market Special Participants and JGB Investors p. 2-3 The 80th meeting of JGB Market Special Participants and the 79th meeting of JGB

Investors were held on March 22 and March 25, 2019 respectively.

Auction schedules on April-June 2019 of JGBi and Liquidity Enhancement Auction were announced. The amount of issuance of JGBi and the allocation of issuance amount for each zone of Liquidity Enhancement Auction on April-June 2019 are consistent with FY2019 issuance plan.

Reopening schedule of 10-40-year Bonds was also announced.

Monthly Topics: JGB holders and Overview of “Measures for the Consumption Tax Hike” p. 4-5 On March 19, the Bank of Japan (BOJ) released the Flow of Funds Accounts of the

4th Quarter 2018. The shares of JGBs (including T-Bills, hereinafter referred to as “JGBs”) holders were updated.

The consumption tax rate is scheduled to be increased by 2% from the current 8% to 10% on October 1, 2019 as stipulated by law. Based on the previous experience with the past consumption tax hike by 3%, mobilize a range of measures and make every effort to ensure that the tax hike will not affect the trend of economic recovery.

IR Office: Our IR activities in March p. 6 IR tours to UK and US

Statistics JGB Primary Market … p. 7 Liquidity Enhancement Auctions and JGB Buy-Back … p. 8

JGB Secondary Market … p. 9 Investor Trends and JGB Outstanding … p. 11

Economic and Financial Trends … p. 15 Information … p. 16

-1-

Monthly Newsletter of the Ministry of Finance, Japan JAPANESE GOVERNMENT BONDS

SUMMARY

The Ministry of Finance www.mof.go.jp

Our fundamental goal of debt management policy is to achieve stable and smooth financing for our national accounts and to minimize medium-to-long term financing costs.

April 2019

The Meetings of JGB Market Special Participants and JGB Investors The 80th Meeting of JGB Market Special Participants and the 79th Meeting of JGB Investors

were held on March 22 and March 25, 2019 respectively. Considering the opinions in the meetings, the MOF decided “Issuance of the Inflation-Indexed Bonds on April-June 2019”, “Issuance Amounts for Liquidity Enhancement Auctions on April-June 2019” and “Issuance and reopening schedule of 10-year, 20-year, 30-year and 40-year Bonds (FY2019)” as explained in the meetings. In addition, the participants discussed the latest JGB market situation and the future outlook.

<Issuance of the Inflation-Indexed Bonds on April-June 2019> Issuance Amount on May 2019 will be about 400 billion yen. Reopening method: 1 issue in FY2019

May, August, November 2019 and February 2020 issues will be the issue No.24. Auction method is Dutch-style-price-competitive auction (0.05 yen bidding scale). Auction Schedule of Inflation-Indexed Bonds on April-June 2019. (It will be implemented on

even months as previous quarter.)

Auction Month Auction Amount

April 2019 Buy-back: Approximately 20 billion yen

May 2019 Issuance: Approximately 400 billion yen

June 2019 Buy-back: Approximately 20 billion yen (Note1) The auctions will be conducted once in April and June. (Note2) Issues eligible for the buy-backs will be those from issue number 17 to 23 for April auction and 17 to 24 for June auction. (Note3) The Ministry of Finance reserves the right not to accept part or all of bids. The plan could be changed owing to market conditions and others. (Source) https://www.mof.go.jp/english/jgbs/topics/press_release/20190326-02e.htm

<Issuance Amounts for Liquidity Enhancement Auctions on April-June 2019> Eligible issues and the maximum issuance amount for each auction will be as shown below.

The plan could be changed owing to market conditions and others.

April 2019 May 2019 June 2019

(1) Issues with remaining maturities of 1-5 years Not be implemented

Approximately 400 billion yen

Not be implemented

(2) Issues with remaining maturities of 5-15.5 years Approximately 600 billion yen

Approximately 600 billion yen

Approximately 600 billion yen

(3) Issues with remaining maturities of 15.5-39 years Approximately 500 billion yen

Not be implemented

Approximately 500 billion yen

(Note1) Remaining maturities are calculated starting from March 31st. (Note2) Eligible issues for 2-year JGBs in (1) zone will be those with remaining maturities of more than one year as April 30th 2019 for

May auction, including the issue to be newly issued in the auction month. (Source) https://www.mof.go.jp/english/jgbs/topics/press_release/20190326-03e.htm

What’s New

-2-

<Issuance and reopening schedule of 10-year, 20-year, 30-year and 40-year Bonds (FY2019)>

As an exception to the schedule above, 10-year Bonds will be issued as a new issue in case the gap between the market interest rate on the auction day and the coupon rate of the issue with the same maturity is more than 0.30%.

-3-

(Note1) In FY2019, 10-year Bonds, 20-year Bonds and 30-year Bonds will be issued every month. (Note2) Auction method for 40-year Bonds is Dutch-style-yield-competitive auction (0.5bp bidding scale). (Note3) The immediate reopening rule applies to 5-year Bonds as before. (Note4) The plan could be changed owing to market conditions and others. (Source) https:/www.mof.go.jp/english/jgbs/topics/press_release/20190326-01e.htm

Maturity Issue Month Apr-2019 May-2019 Jun-2019 Jul-2019 Aug-2019 Sep-2019

Issue No.

Maturity Month

Issue No.

Maturity Month

Issue No.

Maturity Month

Issue No. - No.12 - No.12 - No.12Maturity Month - Mar-2059 - Mar-2059 - Mar-2059

Maturity Issue Month Oct-2019 Nov-2019 Dec-2019 Jan-2020 Feb-2020 Mar-2020

Issue No.

Maturity Month

Issue No.

Maturity Month

Issue No.

Maturity Month

Issue No. - No.12 - No.12 - No.12Maturity Month - Mar-2059 - Mar-2059 - Mar-2059

Jun-2039

Jun-2049

No.354

No.168

No.62

Mar-2029

Mar-2039

Mar-2049

Jun-2029No.355

No.169

No.63

10

20

30

40

10

20

30

40

No.356

Dec-2049No.65

Dec-2039No.171

Dec-2029No.357

Sep-2049No.64

Sep-2039No.170

Sep-2029

1. Breakdown by JGBs (including T-Bills) Holders (end of Dec. 2018)

On March 19, the Bank of Japan (BOJ) released the Flow of Funds Accounts of the 4th Quarter

2018. The shares of JGBs (including T-Bills, hereinafter referred to as “JGBs”) holders were

updated as follows:

BOJ increased its holdings of JGBs by 8.1 trillion yen to 477.5 trillion yen (43.0%).

Banks, etc. decreased its holdings of JGBs by 3.0 trillion yen to 186.0 trillion yen (16.7%).

Foreigners increased its holdings of JGBs by 7.8 trillion yen to 134.4 trillion yen (12.1%).

Total ¥1,091.6 trillion  Total ¥1,110.9 trillion 

The end of Sep. 2018  The end of Dec. 2018 

(trillion yen) (trillion yen)

Monthly Topics

-4-

For more detailed data, please refer to the following: BOJ Time Series Data Search: https://www.stat-search.boj.or.jp/index_en.html

Source: Bank of Japan “Flow of Funds Account (Preliminary Figures)”

Impact of the consumption tax hike BurdenIncrease

BurdenDecrease

Increased Burden due to the consumption tax hike as revenue sources for national and local governments : +¥5.7tn (+¥2.87tn per 1%) Approx. ¥5.7tn ー

Implementation of reduced tax rate ー Approx. ¥1.1tn

Securement of fiscal resources by revision of tobacco and income tax last year, etc. Approx. ¥0.6tn ー

Approx.¥5.2tnIncreased

Burden

Free Early Childhood Education, Enhancement of Social Security System BenefitIncrease

The implementation of Free Early Childhood Education and Childcare from Oct.1, 2019Provision of benefits for supporting low-income pensioners, etc. Approx. ¥2.8tn

The compensation to medical fees for increased consumption tax burden, etc. Approx. ¥0.4tn

Approx. ¥3.2tnBenefit

Increase

New measures to address the consumption tax hike Budget size, etc.

Temporal and Special budget measures (Point Rewards, Vouchers with premiums, Benefits for Housing Purchase “Sumai Kyu-fu kin”, Point Reward System for Promoting Innovative Housing, and Measures for Disaster Prevention, Disaster Mitigation and Building National Resilience, etc.)

Approx. ¥2.0tn(National government

spending)

Tax credit (Expansion of housing loan tax credit, Reduction of tax burden on purchase and possession of automobiles)

Approx. ¥0.3tn(Tax reduction)

Mitigateeconomic impact

amount to approx. ¥2.0tn

Measures amount to approx.¥2.3tn

Measures amount to

approx. ¥2.3tnenough to

overcome this adverse impact

2. Overview of “Measures for the Consumption Tax Hike”

-5-

○ The consumption tax rate is scheduled to be increased by 2% from the current 8% to 10% on October 1, 2019 as stipulated by law.

○ Based on the previous experience with the past consumption tax hike by 3%, mobilize a range of measures and make every effort to ensure that the tax hike will not affect the trend of economic recovery. (1) Combine measures in a well-balanced manner according to their sizes and timing of implementation throughout the FY2019/FY2020 budgets, including “Temporal and Special Measures”, and firmly maintain fiscal discipline as a whole (2) Clarify the objectives of each measure, (3) Implement measures with sufficient consideration on their values for future and economic structural reforms

〇 Provide clearly understandable information on the importance of consumption tax hike and the details of mitigating measures, etc.

Basic Concept

Economic impact of this consumption tax hike is estimated to be approx. ¥2.0tn, suppressed by mitigating measures such as free early childhood education, etc. New measures, amounting to approx. ¥2.3tn, are prepared enough to overcome this adverse impact.

(Note) Figures are under careful examination.

(Source) Presented by Minister of Economic and Fiscal Policy in the Council on Economic and Fiscal Policy (CEFP) on December 20, 2018.

Impact of the Consumption Tax Hike

On March 4, 2019, Mr. Ohata, Director for Debt Management and JGB Investor Relations, attended a panel discussion at the Japan Securities Summit 2019 in London, co-hosted by the Japan Securities Dealers Association and the International Capital Market Association. The topic of the panel was “Japanese Economy: The Road towards Sustainable Growth.” Mr. Ohata explained the fiscal policy and public debt management in Japan.

In addition to attending the event, Mr. Ohata and Ms. Sato, visited London, Copenhagen and Helsinki to meet with various investors and debt management authorities. During these meetings, the team exchanged their views on the Japanese economy, JGB market and debt management policy. Thanks to their broad knowledge of Japan and deep insight into financial markets, the meetings were very stimulating and informative. We are very grateful for their cooperation and generosity.

In the middle of March, Mr. Minowa, Deputy Director of the

Debt Management Policy Division, and Mr. Ando, Section Chief, visited Washington, D.C., NY and Toronto to have meetings with investors, international organizations and debt management authorities. They made presentations mainly about the JGB issuance plan for FY2019, the JGB market and the steady Japanese economic growth. Supported by the investors’ ample knowledge on the Japanese economy and JGBs, the discussions were all the more fruitful. We appreciate their warm welcome and look forward to seeing them again.

IR Office

If you have any questions regarding the contents of this newsletter, please do not hesitate to contact us at: JGB-IR@mof.go.jp

-6-

Auction Results （Bonds）

Auction Date Type of Security Issue Number Maturity Date Nominal

Coupon

Amounts of Competitive

Bids (billion yen)

Amounts of Bids

Accepted (billion yen)

Yield at the Lowest

Accepted Price

Yield at the Average

Price

Amounts of Non-Competitive Bids Tendered

/Accepted (billion yen)

Amounts of Bids Accepted at the

Non-price- competitive Auction Ⅰ (billion yen)

Amounts of Bids Accepted at the

Non-price- competitive Auction Ⅱ (billion yen)

1/8/2019 10-year 353 12/20/2028 0.1% 7,150.9 1,769.5 0.016% 0.015% 0.269 428.3 37.2 1/10/2019 30-year 61 12/20/2048 0.7% 2,269.7 563.6 0.716% 0.715% - 135.5 63.1 1/16/2019 5-year 138 12/20/2023 0.1% 8,344.3 1,621.5 ▲0.144% ▲0.144% - 377.7 299.1 1/24/2019 20-year 167 12/20/2038 0.5% 3,661.8 800.9 0.469% 0.467% - 198.2 134.2 1/29/2019 40-year 11 3/20/2058 0.8% 1,512.7 399.5 0.740% - - - - 1/31/2019 2-year 397 2/1/2021 0.1% 10,340.1 1,702.0 ▲0.166% ▲0.167% - 396.9 171.1 2/5/2019 10-year 353 12/20/2028 0.1% 8,494.0 1,770.2 ▲0.012% ▲0.013% 0.265 428.5 328.9 2/7/2019 30-year 61 12/20/2048 0.7% 2,658.9 563.4 0.589% 0.587% - 135.7 - 2/13/2019 5-year 138 12/20/2023 0.1% 7,858.7 1,623.0 ▲0.149% ▲0.151% - 376.4 298.6 2/15/2019 10-year Inflation-Indexed Bonds 23 3/10/2028 0.1% 1,336.1 399.6 ▲0.287% - - - 22.2 2/19/2019 20-year 167 12/20/2038 0.5% 3,731.1 799.6 0.423% 0.419% - 199.1 118.8 2/28/2019 2-year 398 3/1/2021 0.1% 9,018.6 1,712.4 ▲0.151% ▲0.154% - 387.2 7.6 3/5/2019 10-year 353 12/20/2028 0.1% 7,609.5 1,790.2 0.000% ▲0.002% 0.278 408.6 33.8 3/7/2019 30-year 61 12/20/2048 0.7% 2,585.0 566.8 0.624% 0.621% - 132.1 40.8 3/12/2019 5-year 138 12/20/2023 0.1% 7,660.3 1,625.5 ▲0.155% ▲0.157% - 373.5 254.0 3/19/2019 20-year 167 12/20/2038 0.5% 3,906.3 807.6 0.393% 0.391% - 191.1 144.7 3/26/2019 40-year 11 3/20/2058 0.8% 1,398.4 399.2 0.610% - - - 14.1 3/28/2019 2-year 399 4/1/2021 0.1% 8,564.8 1,621.9 ▲0.174% ▲0.175% - 377.7 228.1

Auction Results （Treasury Discount Bills）

Auction Date Type of Security Issue Number Maturity Date

Amounts of Competitive Bids

(billion yen)

Amounts of Bids Accepted

(billion yen)

Yield at the Lowest

Accepted Price

Yield at the Average

Price

Amounts of Bids Accepted at the

Non-price- competitive Auction Ⅰ (billion yen)

1/8/2019 3-month 805 4/8/2019 14,088.96 3,547.26 ▲0.1455% ▲0.1529% 792.70 1/9/2019 6-month 806 7/10/2019 12,404.20 1,869.48 ▲0.1410% ▲0.1410% 430.50 1/11/2019 3-month 807 4/15/2019 15,178.20 3,514.63 ▲0.1459% ▲0.1504% 825.30 1/17/2019 1-year 808 1/20/2020 8,855.50 1,700.99 ▲0.1741% ▲0.1781% 399.00 1/18/2019 3-month 809 4/22/2019 13,403.10 3,513.75 ▲0.1804% ▲0.1880% 826.20 1/25/2019 3-month 810 5/9/2019 17,491.30 3,513.77 ▲0.1878% ▲0.1932% 826.20 2/1/2019 3-month 811 5/13/2019 12,668.05 3,511.47 ▲0.2307% ▲0.2653% 828.50 2/7/2019 6-month 812 8/13/2019 8,664.10 1,861.04 ▲0.1943% ▲0.2043% 438.90 2/8/2019 3-month 813 5/20/2019 13,855.20 3,511.05 ▲0.2012% ▲0.2158% 828.90 2/15/2019 3-month 814 5/27/2019 14,064.35 3,520.85 ▲0.1954% ▲0.2106% 819.10 2/19/2019 1-year 815 2/20/2020 8,352.20 1,541.75 ▲0.1886% ▲0.1906% 358.20 2/22/2019 3-month 816 6/3/2019 13,622.38 3,520.86 ▲0.2065% ▲0.2207% 819.10 3/1/2019 3-month 817 6/10/2019 14,143.50 3,526.49 ▲0.1489% ▲0.1623% 833.50 3/7/2019 6-month 818 9/10/2019 8,748.00 1,869.08 ▲0.1375% ▲0.1435% 430.90 3/8/2019 3-month 819 6/17/2019 12,828.30 3,511.07 ▲0.1210% ▲0.1291% 828.90 3/14/2019 3-month 820 6/24/2019 12,749.50 3,520.85 ▲0.1358% ▲0.1437% 819.10 3/19/2019 1-year 821 3/23/2020 7,431.50 1,553.38 ▲0.1747% ▲0.1787% 346.60 3/22/2019 3-month 822 7/1/2019 11,681.10 3,504.79 ▲0.1824% ▲0.1958% 815.20

Auction Calendar for Apr. 2019 – Jun. 2019 Auction Date Issue Auction Date Issue Auction Date Issue Auction Date Issue

4/2(Tue) 10-year 4/23(Tue) 2-year 5/24(Fri) T-Bills (3-month) 6/14(Fri) T-Bills (3-month)

4/3(Wed) T-Bills (3-month) 5/8(Wed) T-Bills (3-month) 5/24(Fri) Liquidity Enhancement Auction (remaining maturities of 1-5 years) 6/18(Tue) 5-year

4/4(Thu) 30-year 5/8(Wed) 10-year 5/28(Tue) 40-year 6/19(Wed) T-Bills (1-year)

4/5(Fri) T-Bills (3-month) 5/9(Thu) T-Bills (6-month) 5/30(Thu) 2-year 6/21(Fri) T-Bills (3-month)

4/9(Tue) T-Bills (6-month) 5/10(Fri) T-Bills (3-month) 5/31(Fri) T-Bills (3-month) 6/25(Tue) 20-year

4/9(Tue) 5-year 5/10(Fri) 10-year Inflation-Indexed Bonds 6/4(Tue) 10-year 6/27(Thu) 2-year

4/11(Thu) Liquidity Enhancement Auction (remaining maturities of 15.5-39 years) 5/14(Tue) 30-year 6/6(Thu) T-Bills (6-month) 6/28(Fri) T-Bills (3-month)

4/12(Fri) T-Bills (3-month) 5/16(Thu) T-Bills (1-year) 6/6(Thu) Liquidity Enhancement Auction (remaining maturities of 15.5-39 years)

4/16(Tue) 20-year 5/16(Thu) 5-year 6/7(Fri) T-Bills (3-month) 4/18(Thu) T-Bills (1-year) 5/17(Fri) T-Bills (3-month) 6/11(Tue) Liquidity Enhancement Auction

(remaining maturities of 5-15.5 years)

4/18(Thu) Liquidity Enhancement Auction (remaining maturities of 5-15.5 years) 5/20(Mon) Liquidity Enhancement Auction

(remaining maturities of 5-15.5 years) 6/13(Thu) T-Bills (Approx. 2-month) 4/19(Fri) T-Bills (3-month) 5/22(Wed) 20-year 6/13(Thu) 30-year

Top 10 PDs by Total Purchase in Auctions (Calculated by Duration) (Oct. 2018 ～ Mar. 2019) 1 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. 6 BNP Paribas Securities (Japan) Limited 2 Nomura Securities Co., Ltd. 7 JPMorgan Securities Japan Co., Ltd. 3 Mizuho Securities Co., Ltd. 8 Deutsche Securities lnc. 4 Daiwa Securities Co. Ltd. 9 SMBC Nikko Securities Inc. 5 Merrill Lynch Japan Securities Co., Ltd. 10 Citigroup Global Markets Japan Inc.

JGB Primary Market

Note.1: The above calendar may be changed or added in light of changes in circumstances. In such cases, it will be announced in advance. Note.2: Each issue amount will be announced about one week prior to each auction date. Note.3: The issue date of Treasury Discount Bills auctioned on June 13, 2019 is June 14, 2019, and the maturity date is August 2, 2019.

(Until 31 March 2019)

(Until 31 March 2019)

-7-

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0006,5007,000

JN38

8

JN38

9

JS12

4

308

309

JL46

JN39

0

JN39

1

JN39

2

JS12

5

310

311

JL47

JN39

3

JN39

4

JN39

5

JS12

6

312

JL48

JN39

6

JN39

7

JS12

7

313

314

JL49

JL50

JS12

8

315

316

JL51

JS12

9

317

318

JL52

JS13

0

319

320

JL53

JL54

JS13

1

321

322

JL55

JS13

2

323

324

JL56

JL57

JS13

3

325

JL58

JS13

4

326

327

JL59

JL60

JS13

5

328

JL61

JS13

6

329

JL62

JL63

JS13

7

330

331

JL64

JS13

8

332

JL65

JL66 333

JL67

JL68

JL69

Amount issued by Liquidity Enhancement Auction Outstanding amount in the market (excluding amount issued by Liquidity Enhancement Auction)

1 2 5(Remaining maturities)

（billion yen)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

334

JL70

JL71 33

5JL

72 336

337

JL73

JL74 33

8JL

75JL

76JL

77 339

JL78

JL79

JL80 34

0JL

81JL

82 341

JL83

JL84 34

2JL

85JL

86JL

87 343

JL88

JL89 34

4JL

90JL

91 345

JL92 34

6JL

93JL

94 347

JL95

JL96 34

8JL

97JL

98 349

JL99 35

0JL

100

JL10

135

1JL

102

JL10

3JL

104

352

JL10

5JL

106

353

JL10

7JL

108

JL10

9JL

110

JL11

1JL

112

JL11

3JX

1JL

114

JL11

5JX

2JL

116

JL11

7JX

3JL

118

JL11

9JL

120

JL12

1JL

122

JX4

JL12

3JL

124

JL12

5JL

126

JL12

7JX

5JL

128

JL12

9JL

130

JL13

1JX

6JL

132

JL13

3JL

134

JL13

5JL

136

JX7

JL13

7JL

138

JL13

9JL

140

JX8

JL14

1JL

142

JX9

JL14

3JL

144

JX10

JL14

5JX

11JL

146

JX12

JL14

7JX

13JL

148

JX14

JL14

9JX

15JL

150

JX16

Amount issued by Liquidity Enhancement Auction Outstanding amount in the market (excluding amount issued by Liquidity Enhancement Auction)

5 10 15.5(Remaining maturities)

（billion yen)

0500

1,0001,5002,0002,5003,0003,5004,000

JL15

1

JX17

JL15

2

JX18

JL15

3

JX19

JL15

4

JX20

JL15

5

JX21

JL15

6

JX22

JL15

7

JX23

JL15

8

JX24

JL15

9

JX25

JL16

0

JX26

JL16

1

JL16

2

JX27

JL16

3

JL16

4

JX28

JL16

5

JL16

6

JX29

JL16

7

JX30

JX31

JX32

JX33

JX34

JX35

JX36

JX37

JX38

JX39

JX40

JX41

JX42

JX43

JX44

JX45

JX46

JX47

JX48

JX49

JX50

JX51

JX52

JX53

JX54

JX55

JX56

JX57

JX58

JU1

JX59

JX60

JX61

JU2

JU3

JU4

JU5

JU6

JU7

JU8

JU9

JU10

JU11

Amount issued by Liquidity Enhancement Auction Outstanding amount in the market (excluding amount issued by Liquidity Enhancement Auction)（billion yen)

(Remaining maturities)15.5 20 39

Results of Liquidity Enhancement Auctions

Auction Date Amounts of Competitive

Bids (billion yen)

Amounts of Bids

Accepted (billion yen)

Average Accepted Spread

Highest Accepted Spread

Issues Re-opened

1/18/2019 2,090.8 598.2 0.008% 0.009% 10-year(333, 334, 335, 338, 339, 346, 347) 20-year(69, 70, 72, 88, 92, 93, 94, 95, 96, 99, 100, 101, 108, 110, 115, 123, 124, 148) 30-year(5, 9)

1/22/2019 2,211.8 399.0 ▲0.006% ▲0.003%

2-year(384, 387, 391) 5-year(130, 131, 134) 10-year(312, 313, 314, 315, 316, 317, 318, 319, 320, 322, 323, 324, 330) 20-year(48, 50, 56, 58, 63)

2/21/2019 2,008.0 596.1 ▲0.008% ▲0.007%

10-year(334, 335, 338, 339, 340, 341, 343, 344, 345, 346, 347, 348, 352) 20-year(68, 70, 75, 83, 84, 90, 92, 93, 95, 96, 102, 113, 117, 122, 125, 127, 130, 133, 134, 135, 136, 139, 140, 142, 145, 146, 148, 149) 30-year(6, 7, 14)

2/26/2019 990.2 499.4 0.006% 0.012% 20-year(151, 152, 153, 154, 158, 161, 164, 165, 166) 30-year(20, 24, 26, 28, 29, 33, 34, 35, 36, 37, 38, 39, 40, 41, 46, 47, 57, 59) 40-year(1, 2, 5, 9)

3/14/2019 1,596.9 598.8 ▲0.002% 0.000% 10-year(333, 334, 335, 337, 338, 339, 341, 343, 344, 345, 346, 347) 20-year(68, 69, 70, 83, 84, 88, 92, 93, 94, 95, 96, 116, 117, 118, 128, 139, 145, 148) 30-year(1, 4, 5)

3/22/2019 1,763.6 399.6 ▲0.016% ▲0.013%

2-year(386, 387, 388, 389, 391) 5-year(123, 124, 125, 127, 129, 130, 131, 134, 135, 136) 10-year(309, 311, 312, 313, 315, 316, 317, 319, 320, 322, 323, 324, 326, 327, 329, 330, 331, 332) 20-year(45, 48, 49, 50, 51, 54, 55, 56, 60, 62, 65)

Target Zones of Liquidity Enhancement Auctions for the First Quarter of FY 2019

10-year Inflation-Indexed

Auction Date Amounts of

Competitive Bids (billion yen)

Amounts of Bids Accepted

(billion yen)

Average Accepted

Spread (yen)

Highest Accepted

Spread (yen) Issue Numbers

8/17/2018 94.8 20.0 ▲0.036 0.04 18, 19, 20, 21, 22, 23 10/12/2018 102.6 20.1 ▲0.133 ▲0.11 18, 21, 22, 23 12/17/2018 156.4 20.0 ▲0.363 ▲0.33 22, 23 2/20/2019 129.9 20.1 ▲0.035 ▲0.02 17, 18, 19, 22, 23

Liquidity Enhancement Auctions and JGB Buy-Back

①Remaining maturity : approx.1‐～5‐year

③Remaining maturity : approx.15.5‐～39‐year

Note1： JN shows 2‐year JGBs. JS shows 5‐year JGBs. JL shows 20‐year JGBs. JX shows 30‐year JGBs. JU shows 40‐year JGBs. Outstanding amount is as of the end of February 2019. Note2： All issues in the graph above will be eligible afterward.

Buy-back Results

(Until 31 March 2019)

(Until 31 March 2019)

②Remaining maturity : approx.5‐～15.5‐year

-8-

-1%

0%

1%

2%

3%

4%

5%

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

BEI (Japan : 10 year)

BEI (U.S.A. : 10 year)

BEI (U.K. : 10 year)

Note: BEI (Japan: 10 year) is calculated based on the compound interest rate of the new Inflation-Indexed Bonds and the 10-Year Bonds Source: Japan: Calculation by the Ministry of Finance based on the information on interest rates offered by NIKKEI QUICK.

U.S.A., U.K.: Bloomberg.

JGB Secondary Market

JGB Yield Curves

Source: Japan Bond Trading Co.,Ltd.

Yields of JGB

Long - Term Interest Rates （10Yr） Source: Bloomberg

Source: Bloomberg

-9-

Yield and Volatility (10Yr)

Break-Even Inflation Rates

Source: Bloomberg, Calculation by the Ministry of Finance

(Until 28 February 2019)

(Until 28 February 2019)

(Until 28 February 2019)

(Until 28 February 2019)

0

20

40

60

80

100

120

140

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

0100200300400500600700800900

1,0001,1001,2001,3001,4001,5001,600

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Treasury Discount BillsMedium Term BondsLong Term Bonds

0

500

1,000

1,500

2,000

2,500

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Bond-Lending

Bond-Gensaki

-0.1%

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Call Rate (Uncollateralized Overnight)

TIBOR 3-months (Euro-Yen)

Basic Loan Rate

Short-Term Interest Rates

Source: Bank of Japan, Japanese Bankers Association

JGB Over-the-Counter Trading Volume (TOKYO)

Trading Volume of 10-Year JGB Futures

Repurchase Transactions

-10-

Source: Japan Securities Dealers Association

Source: Tokyo Stock Exchange (until Mar.2014), Osaka Exchange (from Apr. 2014)

Source: Japan Securities Dealers Association

(trillion yen)

(trillion yen)

(trillion yen)

(Until 28 February 2019)

0

20

40

60

80

100

120

140

160

180

200

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-190

10

20

30

40

50

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

200210220230240250260270

Apr 2013(Actual)

Feb 2019(Actual)

Monetary Base 155 497

JGBs 98 466

CP 1.4 2.3

Corporate Bonds 2.9 3.3

ETFs 1.7 24.5

J-REITs 0.13 0.51

Total Assets 175 562 0

50

100

150

200

250

300

350

400

450

500

550

Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18

Total Assets

Monetary Base

JGBs

QQE2QQE（trillion yen）

Super long-term

Long-term

Medium-term

T-bills

-9.0

-7.0

-5.0

-3.0

-1.0

1.0

3.0

5.0

7.0

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan

City Banks

Net Purchase

Net Sale

2015 2016 2017 2018 2019

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan

Regional banks

Net Purchase

Net Sale

2015 2016 2017 20192018

-0.5

0.0

0.5

1.0

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan

Life and non-life insurance companies

Net Purchase

Net Sale

2015 2016 2017 2018 2019

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

26.0

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan

Foreigners

Net Purchase

Net Sale

2015 2016 2017 20192018

(trillion yen) (trillion yen)

(trillion yen) (trillion yen)

-11-

Trends in Bank Assets by Types

Investor Trends and JGB Outstanding

Trends in JGBs Transactions (by investor type)

BOJ Trends

Regional Banks City Banks

Source: Bank of Japan

(trillion yen) (trillion yen)

Loans

Cash and Deposits

Government Bonds

Municipal Bonds

Corporate Bonds

Equities

Foreign Securities

Source: Bank of Japan

Source: Japan Securities Dealers Association

-6

-4

-2

0

2

4

6

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Short-term debt securities Long-term debt securities Equity and investment fund shares

Net

Purchase

Net

Sales

-1

-0.5

0

0.5

1

1.5

2

2.5

3

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Short-term debt securities Long-term debt securities Equity and investment fund shares

Net

Purchase

Net

Sales

-8

-6

-4

-2

0

2

4

6

8

10

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

Short-term debt securities Long-term debt securities Equity and investment fund shares

Net

Purchase

Net

Sales

40

60

80

100

120

140

1

2

3

4

5

6

7

8

9

10

11

12

Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18

Amount of JGBHoldings (right)

Proportion of JGB Holdings (left)

(trillion yen)(%)12.1%

134.4

12.1%

34.1%

62.9%

0%

10%

20%

30%

40%

50%

60%

70%

Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18

①Market Share of Foreign Investors (JGB Futures Market)

②Market Share of Foreign Investors (JGB Market)

③JGB Holdings by Foreign Investors

0%

5%

10%

15%

20%

25%

30%

35%

40%

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

City Banks Trust Banks Insurance Companies Foreigners

-12-

JGBs Holdings by Foreign Investors

Banks(Banking Accounts) Life Insurance Companies

Transactions of Domestic Securities by Non-Residents

Note.1: Quarterly basis. Note.2: “JGB” includes T-Bills. Source: Bank of Japan

Transactions of Foreign Securities by Residents (by Investor types)

Foreign Investors Presence

Note.1: Quarterly basis. Note.2: “JGB” includes T-Bills. The figures of ②excludes dealers’ transactions. Source: Bank of Japan, Japan Securities Dealers Association, Tokyo Stock Exchange,

Osaka Exchange

(trillion yen)

(trillion yen)

Source: Japan Securities Dealers Association

(trillion yen)

Outstanding of Repurchase Agreements (by Investor types)

Source: Ministry of Finance Source: Ministry of Finance

Source: Ministry of Finance

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

800

850

900

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017

17.0% 17.8% 18.3% 18.2% 17.9% 17.3% 16.4% 15.1% 14.3% 13.4%

11.4%13.0% 12.5% 11.9% 12.4% 12.0% 11.1% 10.6% 10.5% 10.5%

8.9%8.5%

7.9% 8.6% 8.1% 7.8% 7.8% 7.9% 7.7% 8.2%9.2%8.4%

9.0% 8.6% 8.1% 8.1% 8.2% 7.8% 8.2% 7.1%8.4%

8.8%8.4% 7.8% 7.8% 7.8% 7.4% 7.8% 6.8% 6.8%

5.3%

5.2%4.7%

4.9% 4.4% 4.2% 5.0% 4.2% 4.4% 5.0%

5.6%

4.9%5.2%

4.6% 4.5%5.0% 4.3% 4.4% 4.8% 4.7%

5.5%

5.5%4.8%

4.8%5.3%

4.5% 4.5% 5.0% 4.8% 5.0%

6.2%

5.2%5.1%

5.6%4.7%

4.8% 5.2% 4.9% 5.1% 4.7%

5.0%

4.7%5.2%

4.4%4.3%

4.6% 4.2% 4.5% 4.1% 4.0%

14.8%

14.4%

14.4%14.9%

15.6%16.5%

17.7% 18.4% 19.2% 19.6%

2.7%

3.6%

4.6%

5.8%

6.7%

7.5%8.3%

9.4%10.1%

11.1%

20 yrs-

10-20 yrs

9-10 yrs

8-9 yrs

7-8 yrs

6-7 yrs

5-6 yrs

4-5 yrs

3-4 yrs

2-3 yrs

1-2 yrs

-1 yr

（trillion yen）

（at the end of FY）

545.9

594.0

636.3669.9

705.0

743.9

774.1

805.4830.6

*years to maturity

Average

YTM* 6Y3M 6Y5M 6Y8M 7Y0M 7Y3M 7Y7M 8Y0M 8Y5M 8Y7M 8Y10M

Average YTM*

(excluding saving

bonds)6Y4M 6Y6M 6Y10M 7Y1M 7Y5M 7Y8M 8Y0M 8Y5M 8Y8M 8Y11M

853.2

JGB and T-Bill Holders

Breakdown by JGB and T-Bill Holders (The end of Dec. 2018 QE)

Source: Bank of Japan “Flow of Funds Accounts (Preliminary Figures)” Note1: “JGB” includes “FILP Bonds.” Note2: “Banks, etc.” includes “Japan Post Bank”, “Securities investment trust” and “Securities companies.” Note3: “Life and Non-life insurance, etc.” includes “Japan Post Insurance.”

(trillion yen)

Breakdown of Outstanding Amount of General Bonds by Remaining Years to Maturity

T-Bill Holders

Total 97.8 trillion yen

JGB Holders

Total 1,013.1 trillion yen

Total 1,110.9 trillion yen

-13-

General Government

(ex Public Pensions)

3.4

0.3%Fiscal Loan Fund

0.0

0.0%

BOJ

477.5

43.0%

Banks,etc.

186.0

16.7%

Life and Non-life

Insurance,etc.

209.2

18.8%

Public Pensions

45.5

4.1%

Pension Funds

31.0

2.8%

Foreigners

134.4

12.1%

Households

13.0

1.2%

Others

11.0

1.0%

General Government

(ex Public Pensions)

0.0

0.0%Fiscal Loan Fund

0.0

0.0%BOJ

11.4

11.7% Banks,etc.

14.7

15.1%

Life and Non-life

Insurance,etc.

2.0

2.1%

Public Pensions

0.0

0.0%

Pension Funds

0.0

0.0%

Foreigners

69.7

71.2%

Households

0.0

0.0%

Others

0.0

0.0%

General Government

(ex Public Pensions)

3.4

0.3%Fiscal Loan Fund

0.0

0.0%

BOJ

466.1

46.0%

Banks,etc.

171.3

16.9%

Life and Non-life

Insurance,etc.

207.1

20.4%

Public Pensions

45.5

4.5%

Pension Funds

31.0

3.1%Foreigners

64.8

6.4%

Households

13.0

1.3%Others

11.0

1.1%

28.29

108.83

87.83

60.76

64.43

51.51

40.75

42.78

39.8142.53

28.82

14.6716.42

16.19 19.04 18.8320.62 19.29

18.05 17.91

11.455.47 6.62 7.08

6.29 8.249.51

10.89 9.30 11.215.44

1.36 1.96 1.92 1.98 2.15 2.28 2.47 2.70 0.880

102030405060708090

100110120130

18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57

(trillion yen）

(FY)

Treasury Bills2-yr bondsJGBs for retail investors (3-yr-Fixed-rate)JGBs for retail investors (5-yr-Fixed-rate)5-yr bondsInflation-Indexed bondsJGBs for retail investors (Floating-rate)10-yr bonds15-yr-floating-rate bonds20-yr bonds30-yr bonds40-yr bonds

Average remaining years to maturity： 9 years and 0 month

0100200300400500600700800900

1,0001,1001,2001,3001,4001,5001,6001,7001,8001,9002,0002,1002,200

17 18 19 20 21 22 23

(billion yen)

(issue number)

Outstanding amount (excl.BOJ holding)BOJ holding

Types The amount of redemption at maturity Scheduled redemption date

2-Year Bonds 2,277.1 April 15

Treasury Bill 1,800.0 April 20

Total 4,077.1

Source: Ministry of Finance

Time-to-Maturity Structure of Outstanding JGB（Dec. 2018）

General Bonds Issuance Amount and Outstanding

Note 1: Issuance Amount: revenue basis, FY2008-2017: Actual, FY2018: Supplementary budget, FY2019: Initial budget Note 2: Outstanding: nominal basis, FY2008-2017: Actual, FY2018 Supplementary budget, FY2019: Initial budget Source: Ministry of Finance

Market-held Balance of the Inflation-Indexed Bonds (as of the end of February, 2019)

(trillion yen)

Scheduled redemption of JGB at maturity in April, 2019

Note.1: The figures are based on the outstanding JGBs at the end of February, 2019. Note.2: The figures are the scheduled redemption at maturity and may be different from the actual redemption due to Buy-back of JGBs. Note.3: The figures do not include "JGB for Retail Investors". Note.4: If the redemption date coincides with bank holiday, the payment of redemption is carried out on the following business day. Note.5: Figures may not sum up to total because of rounding.

(billion yen)

Source: Ministry of Finance, Bank of Japan

-14-

545.9594.0

636.3669.9

705.0743.9

774.1805.4

830.6 853.2880.2 896.7

127.1

142.4 143.1

163.1 163.3 153.6

158.0 150.5 148.3

140.0 140.2 136.7

100

200

300

400

500

600

700

800

900

0

30

60

90

120

150

180

08 09 10 11 12 13 14 15 16 17 18 19

Outstanding (right-hand scale)Issuance Amount (left-hand scale)

-30%

-20%

-10%

0%

10%

20%

30%

Jan-

13

May

-13

Sep-

13

Jan-

14

May

-14

Sep-

14

Jan-

15

May

-15

Sep-

15

Jan-

16

May

-16

Sep-

16

Jan-

17

May

-17

Sep-

17

Jan-

18

May

-18

Sep-

18

(Diffusion index)

Large enterprises/Manufacturing

Large enterprises/Non-Manufacturing

Small enterprises/Manufacturing

Small enterprises/Non-Manufacturing

1.6 2.1

1.7

-1.0 -0.5

0.9

2.0

1.6

4.3

3.9

5.0

3.3

6.1

4.9

6.1

4.0

6.0

4.6

7.0

4.3

5.9 5.0

5.7

2.5

-8

-6

-4

-2

0

2

4

6

8

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

Q1

2017

Q2

2017

Q3

2017

Q4

2018

Q1

2018

Q2

2018

Q3

2018

Q4

Primary Income Trade Balance

Services Secondary Income

Current Account

5.0

-3.1-1.5

1.2

4.6

3.43.4

-0.2

3.7

-7.2

0.41.9

5.4

0.7

-0.2-1.6

2.9

0.1

0.9 0.9

3.61.8 2.5

1.6

-0.4

1.9

-2.4

1.9

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ

2012 2013 2014 2015 2016 2017 2018

(％)

Private Demand Public Demand

Foreign Demand Real GDP

Annualized rate of Change from the previous quarter (Seasonally adjusted)

(CY)

600

650

700

750

800

850

900

950

1,000

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

(billion yen)

Monthly Quarter (Mean)

0

100

200

300

400

500

600

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

(trillion yen)

Banknotes in Circulation

Coins in Circulation

Current Account Balances

0.3%

0.2%

-1

0

1

2

3

4(%)

CPI

CPI excluding food (excludingalcohilic beverages) and energy

Change from the previous year

Apr.4, 2013BOJ released QQE

85

90

95

100

105

110

115

Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

(2015 average=100・Seasonally Adjusted Index)

Production Shipments

Inventory Inventory Ratio

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19

（ratio）

Feb, 20191.63 times

Feb, 20192.3％

Job opening-to-application ratio(right scale)

Unemployment rate(left scale)

Aug, 20090.42times

Jul, 20095.5％

Real GDP Growth Rate

Employment Conditions

Prices

Changes in Current Account

Monetary Base Indices of Industrial Production

Total Value of Machinery Orders (Private Sector exc. Volatile orders) TANKAN (Business Conditions)

Source: Cabinet Office

Source: Ministry of Internal Affairs and Communications

Source: Ministry of Health, Labour and Welfare Ministry of Internal Affairs and Communications Source: Ministry of Finance

Source: Ministry of Economy, Trade and Industry

Source: Cabinet Office

(trillion yen)

Economic and Financial Trends

Source: Bank of Japan

Source: Bank of Japan

-15-

English Publications on JGBs Frequency URL Debt Management

Message from the Financial Bureau As needed https://www.mof.go.jp/english/jgbs/debt_management/message.htm

About JGBs As needed https://www.mof.go.jp/english/jgbs/debt_management/guide.htm

About the Debt Management Policy As needed https://www.mof.go.jp/english/jgbs/debt_management/about.htm

JGB Issuance Plan As needed https://www.mof.go.jp/english/jgbs/debt_management/plan/index.htm

Auction Calendar

Auction Calendar Monthly https://www.mof.go.jp/english/jgbs/auction/calendar/index.htm

Historical Data of Auction Results Monthly https://www.mof.go.jp/english/jgbs/auction/past_auction_results/index.html

Topics

Product Characteristics of the JGB As needed https://www.mof.go.jp/english/jgbs/topics/bond/index.html

Treasury Discount Bills (T-Bills) As needed https://www.mof.go.jp/english/jgbs/topics/t_bill/index.htm

Japanese Government Guaranteed Bonds Annual https://www.mof.go.jp/english/jgbs/topics/gov_guaranteed_bonds/index.htm

Interest Rate Swap Semiannual https://www.mof.go.jp/english/jgbs/topics/swap/index.htm

Taxation of Government Bonds As needed https://www.mof.go.jp/english/jgbs/topics/taxation2016/index.html

For Individual Investors As needed https://www.mof.go.jp/english/jgbs/topics/individual/index.htm

Data

Central Government Debt Quarterly https://www.mof.go.jp/english/jgbs/reference/gbb/index.htm

Interest Rate Daily https://www.mof.go.jp/english/jgbs/reference/interest_rate/index.htm

STRIPS Monthly https://www.mof.go.jp/english/jgbs/reference/jgbstat/index.htm

Dialogue with the market

Advisory Councils on Government Debt Management Each Meeting https://www.mof.go.jp/english/about_mof/councils/gov_debt_management/index.html

Meeting of JGB Market Special Participants Each Meeting https://www.mof.go.jp/english/about_mof/councils/jgbsp/index.html

Meeting of JGB Investors Each Meeting https://www.mof.go.jp/english/about_mof/councils/jgb_investor/index.html

Publications

Debt Management Report Annual https://www.mof.go.jp/english/jgbs/publication/debt_management_report/index.htm

JGB Newsletter Monthly https://www.mof.go.jp/english/jgbs/publication/newsletter/index.htm

Debt Management Policy Division, Financial Bureau, Ministry of Finance 3-1-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8940 Japan

Phone: 81-3-3581-4111 Web: https://www.mof.go.jp/

To subscribe to our Newsletter mailing list, please email: JGB-IR@mof.go.jp

-16-

Information