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Home > Announcements > Releases 2004 > Establishment of Principal Terms and Conditions for the Sale of Japanese Government Securities with Repurchase Agreements to Provide the Markets with a Secondary Source of Japanese Government Securities
April 9, 2004
Bank of Japan
At the Monetary Policy Meeting held today, the Policy Board of the Bank decided to establish Principal Terms and Conditions for the Sale of Japanese Government Securities with Repurchase Agreements to Provide the Markets with a Secondary Source of Japanese Government Securities, with a view to facilitating the Bank's money market operations as well as to contributing to smooth settlement of both Japanese government securities and funds (see Attachment for the full text of the Principal Terms and Conditions).
These Principal Terms and Conditions prescribe the principles for the Bank of Japan's sale of Japanese government securities (JGSs) with repurchase agreements to provide a temporary and secondary source of JGSs to the markets, with a view to facilitating the Bank's money market operations as well as to contributing to smooth settlement of both JGSs and funds.
At the Head Office (Operations Department) of the Bank.
Eligible counterparties shall, pursuant to the Bank's relevant rules, be selected from financial institutions (as defined in Article 37, Paragraph 1 of the Bank of Japan Law, Law No.89, 1997, excluding the Resolution and Collection Corporation and bridge banks as defined in Article 2, Paragraph 13 of the Deposit Insurance Law, Law No.34, 1971), domestic and foreign securities companies (Article 10, Paragraph 1, Clause 2 of the Bank of Japan Law Enforcement Order [Order No. 385, 1997] and Article 10, Paragraph 1, Clause 4 of the same Order, respectively), securities finance companies (Article 10, Paragraph 1, Clause 3 of the Order), and tanshi companies (Article 10, Paragraph 1, Clause 5 of the Order).
Securities to be sold shall, pursuant to the Bank's relevant rules, be selected from JGSs (Japanese government bonds with coupons, treasury bills and financing bills) held by the Bank.
The Bank shall decide to sell specific issues of JGSs when the Bank deems it appropriate in light of the conditions of financial markets. The conditions include such cases that the liquidity of those issues is likely to decline significantly and the negative effect can spread over JGS markets.
Securities sold shall be repurchased on the next business day of the date of sales. When the date of sales is four business days prior to the date of interest payment of the securities, those securities shall be repurchased on the date of interest payment.
|(i) up to 1 year||0.997|
|(ii) more than 1 year and up to 5 years||0.994|
|(iii) more than 5 years and up to 10 years||0.980|
|(iv) more than 10 years and up to 20 years||0.964|
|(v) more than 20 years||0.948|
These Principal Terms and Conditions shall become effective on a date designated by the Governor, which shall be no later than May 31, 2004.
Eligible counterparties prescribed in paragraph 3. can be selected on and after April 9, 2004.