Principal Terms and Conditions concerning the Operation of Yen Accounts for Foreign Central Banks and International Organizations
March 26, 1999 (April 1, 1999)
Revision:November 14, 2003 (January 19, 2004)
January 23, 2009 (February 4, 2009)
March 10, 2017 (June 5, 2017)
* Date of implementation in brackets
The Bank of Japan (hereinafter the "BOJ") shall provide foreign central banks (including institutions equivalent thereto) and international organizations (hereinafter the "Counterparty Central Banks") with yen accounts (hereinafter the "Yen Account" or the "Yen Accounts" depending on context) upon the approval of the BOJ's Policy Board. The operational procedures of the Yen Accounts shall be managed under the following terms and conditions (hereinafter these "Principal Terms and Conditions").
1. Yen Accounts
- (1) The Yen Accounts may bear interest.
- (2) The Yen Accounts shall, in principle, be credited when the BOJ receives yen funds from the Counterparty Central Banks for deposit, or when it receives crediting requests from third parties.
- (3) The Yen Accounts shall, in principle, be debited upon individual instructions from the Counterparty Central Banks, on the condition that the amount of funds available in the relevant Yen Account is equivalent to or exceeds the amount to be debited.
2. Purchases and Sales of Foreign Currencies
- (1) On behalf of, and upon individual instructions from, the Counterparty Central Banks, the BOJ may buy and/or sell foreign currencies in exchange for Japanese yen under a special arrangement between the Counterparty Central Banks and the BOJ.
- (2) The foreign currencies to be purchased and/or sold shall be limited to those tradable in the Tokyo market.
- (3) The counterparties to such transactions shall either be commercial banks or the Foreign Exchange Fund Special Account of the Japanese Government.
- (4) The yen funds traded against the foreign currencies shall be settled through the relevant Yen Account of the Counterparty Central Banks.
- (1) Interest shall accrue on an interest-bearing Yen Account's (hereinafter the "Interest-Bearing Account") final balance (hereinafter the "Interest-Bearing Balance") on each business day.
- (2) The interest calculation period shall be the number of days from and including the day immediately following each business day up to and including the following business day.
- (3) The applicable interest rates shall be the following rates set forth in (a) and (b) below, each of which shall be in accordance with the amount of the Interest-Bearing Balance on each business day.
- (a) Balance up to and including the amount separately specified for each Interest- Bearing Account (hereinafter the "Threshold Amount")
The interest rate decided by the BOJ based on the prevailing market rate for sales of Japanese government securities under repurchase agreements on the business day immediately preceding the relevant business day (hereinafter the "BOJ Market Rate") less 0.05 percent. (If, however, the rate falls below 0 percent, or if the Counterparty Central Banks request 0 percent to be applied, then the rate shall be 0 percent.)
- (b) Balance exceeding the Threshold Amount
The BOJ Market Rate less 0.05 percent. (If, however, the rate is above 0 percent, and the Counterparty Central Banks request 0 percent to be applied, then the rate shall be 0 percent.)
4. Transfers concerning the Notes
- (1) The BOJ shall keep record of notes issued by the Japanese government as contribution to the IMF and other international organizations (hereinafter the "Notes").
- (2) The issuance and redemption of the Notes shall be settled through the relevant Yen Account of the international organizations.
5. Service Costs
- (1) No commissions shall be charged in relation to the services provided by the BOJ under these Principal Terms and Conditions.
- (2) All out-of-pocket expenses, excluding charges for communications between the Counterparty Central Banks and the BOJ, shall be debited to the relevant Yen Account of the Counterparty Central Banks.
6. Termination of the Yen Accounts
Both the Counterparty Central Banks and the BOJ shall be entitled to terminate their agreements concerning the Yen Accounts at any time, upon giving notice to such effect.
7. Governing Law
These Principal Terms and Conditions shall be governed by and construed in accordance with the laws of Japan.