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QuestionWhat types of open market operations does the Bank conduct?

Answer

Open market operations are the Bank's primary means of money market operations.

Open market operations can be classified into two broad categories: (1) operations to supply funds to financial markets, such as those for the Bank to provide loans or purchase Japanese government bonds (JGBs), and (2) operations to absorb funds from financial markets, such as sales of bills issued by the Bank and sales of Japanese government securities (JGSs) held by the Bank with repurchase agreements.

The following explains the Bank's major funds-supplying operations and funds-absorbing operations -- excluding those conducted as temporary measures.

Major Operations by the Bank

Funds-Supplying Operations

Table: Funds-Supplying Operations
Type of Operations Description
Funds-supplying operation against pooled collateral The Bank provides loans against financial assets accepted as eligible collateral based on the Guidelines on Eligible Collateral, such as government bonds, municipal bonds, government-guaranteed bonds, Fiscal Investment and Loan Program (FILP) agency bonds, corporate bonds, CP, bills, and loans on deeds.
Outright purchase of JGBs The Bank purchases JGBs with coupons.
Outright purchase of treasury discount bills (T-Bills) The Bank purchases T-Bills.
Outright purchases of CP and corporate bonds The Bank purchases CP and corporate bonds.
Purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) The Bank purchases ETFs and J-REITs.
Purchase of JGSs with repurchase agreements The Bank purchases JGBs with coupons and T-Bills with an agreement to sell them back to the counterparty on a specified date.
Purchase of CP with repurchase agreements The Bank purchases eligible CP based on the Guidelines on Eligible Collateral with an agreement to sell them back to the counterparty on a specified date.

Funds-Absorbing Operations

Table: Funds-Absorbing Operations
Type of Operations Description
Sale of bills The Bank sells bills drawn, received, and paid by the Bank with a maturity of three months or less.
Sale of JGSs with repurchase agreements The Bank sells JGBs with coupons and T-Bills with an agreement to repurchase them from the counterparty on a specified date.
Outright sale of T-Bills The Bank sells its T-Bills to the counterparty.

Related Page

Details of the Bank's operations are available at Market Operations.