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Principal Terms and Conditions for the Asset Purchase Program (Invalid)

October 28, 2010

Revision:March 14, 2011
August 4, 2011
October 27, 2011
February 14, 2012
April 27, 2012
July 12, 2012
September 19, 2012
October 30, 2012
December 20, 2012
January 22, 2013

1. Purpose

The terms and conditions prescribe the principles for the Bank of Japan's Asset Purchase Program (a program established on the Bank's balance sheet to conduct outright purchases of various financial assets and funds-supplying operations against pooled collateral [loans that are made against pooled collateral as open market operations], hereinafter referred to as "Program"), introduced as a temporary measure to encourage a decline in longer-term interest rates and various risk premiums, with a view to further enhance monetary easing.

2. Location and Eligible Counterparties of Purchases and Loans

The location and eligible counterparties of purchases and loans shall be determined pursuant to the relevant rules of the Bank, for each financial asset to be purchased and loan.

3. Method for Operating the Program, etc.

  1. (1) The Bank shall conduct outright purchases of financial assets and funds-supplying operations against pooled collateral through the Program.
  2. (2) Financial assets to be purchased through the Program as described in (1) shall, pursuant to the relevant rules of the Bank, be determined from the following assets: Japanese government bonds with coupons, treasury discount bills (treasury bills and financing bills, hereinafter the same), CP (commercial paper [excluding asset-backed commercial paper and commercial paper issued by real estate investment corporations], dematerialized commercial paper issued by domestic corporations, commercial paper issued by real estate investment corporations, dematerialized commercial paper issued by real estate investment corporations, dematerialized commercial paper issued by foreign corporations with guarantees, asset-backed commercial paper, and dematerialized asset-backed commercial paper, hereinafter the same), corporate bonds (corporate bonds and bonds issued by real estate investment corporations, hereinafter the same), beneficiary interest in index-linked exchange-traded funds, and investment equity issued by real estate investment corporations.

4. Maximum Outstanding Amount of Purchases and Loans

  1. (1) The maximum outstanding amount of financial assets purchased through the Program shall be about 76 trillion yen. The maximum outstanding amount of loans provided through the Program shall be about 25 trillion yen.
  2. (2) The maximum outstanding amount for each financial asset purchased through the Program shall be as follows.
    1. a. Japanese government bonds with coupons : about 44 trillion yen
    2. b. Treasury discount bills : about 24.5 trillion yen
    3. c. CP : about 2.2 trillion yen
    4. d. Corporate bonds : about 3.2 trillion yen
    5. e. Beneficiary interest in index-linked exchange-traded funds : about 2.1 trillion yen
    6. f. Investment equity issued by real estate investment corporations : about 0.13 trillion yen
  3. (3) Asset purchases and loan provision shall be conducted up to the maximum outstanding amounts specified in (1) and (2) by the end of 2013. From January 2014, the Bank shall purchase financial assets and provide loans every month, the amount of which shall be determined pursuant to the relevant rules of the Bank, notwithstanding (1) and (2).

5. Specifications Necessary for Purchases and Loans

For each financial asset purchased and loan, the specifications necessary for conducting purchases and providing loans shall be determined pursuant to the relevant rules of the Bank, in addition to 2., 3., and 4.

Supplementary Provision

These terms and conditions shall become effective today. However, provision regarding purchases of beneficiary interest in index-linked exchange-traded funds and investment equity issued by real estate investment corporations provided in 3.(2) shall become effective on the date designated by the Governor, which shall be on or after the date the Bank obtains authorization from the Minister of Finance and the Commissioner of the Financial Services Agency in accordance with Article 43, Paragraph 1 and Article 61-2 of the Bank of Japan Act, Act No. 89, 1997, provided that the Bank obtains such authorization.