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Outline of Transactions for Outright Purchases of Japanese Government Bonds

As of April 28, 2022
Bank of Japan
Financial Markets Department

I. Introduction

This document is an outline of outright purchases of Japanese government bonds (JGBs), which the Bank of Japan conducts based on the "Principal Terms and Conditions for the Outright Purchase/Sale of Japanese Government Bonds." Please note that the following information may change in the future.

II. Principles

A. Location of purchases

The Bank's Head Office (Operations Department).

B. Bonds to be purchased

Among the Japanese government securities (JGSs) dealt with under the JGB Book-Entry System, those to be purchased by the Bank shall be as follows:

  1. JGBs with coupons excluding floating-rate bonds and inflation-indexed bonds.
  2. Floating-rate bonds and inflation-indexed bonds.

C. Method for auctions

1. Method for JGBs with coupons excluding floating-rate bonds and inflation-indexed bonds:

The Bank shall purchase through either of the following methods.

  1. a. Competitive auction method
    A multiple-price competitive auction under the conventional method shall be conducted for each purchase in which counterparties bid their "desired yield spreads," which are calculated by subtracting "benchmark yields" (yields which the Bank determines separately) from the yields at which counterparties seek to sell to the Bank.
  2. b. Fixed-rate method
    The Bank shall purchase at the fixed-rate calculated for each purchase by adding the yield spread for each issue, which the Bank determines in accordance with the guideline for money market operations, to the benchmark yield.

2. Method for floating-rate bonds and inflation-indexed bonds:

A multiple-price competitive auction under the conventional method shall be conducted for each purchase in which counterparties bid their "desired price spreads," which are calculated by subtracting "benchmark prices" (prices which the Bank determines separately) from the prices at which counterparties seek to sell to the Bank.

III. Auction

A. Notification of auction guidelines (offer)

When conducting outright purchases of JGBs, the Bank selects auction participants from eligible counterparties and notifies them of the following matters through the Bank of Japan Financial Network System (BOJ-NET).

  1. (a) Total amount of offer1
  2. (b) Issues to be purchased
  3. (c) Purchase date
  4. (d) Bid-submission cut-off date and time
  5. (e) Lower limit of desired yield spreads (only for the competitive auction method and when deemed necessary by the Bank)
  6. (f) Yield spreads to be added to the benchmark yields (only for the fixed-rate method)
  7. (g) Other matters deemed necessary by the Bank
  1. Notes 1: For the fixed-rate method, the Bank may not set an upper limit on the total amount of offer.

B. Submission of bids

Auction participants notify the Bank of the following matters through the BOJ-NET until the bid-submission cut-off date and time notified in subsection A.

1. For JGBs with coupons excluding floating-rate bonds and inflation-indexed bonds:

  1. a. Competitive auction method
    Desired sale amount and yield2 per issue, and the total amount.
    1. Note 2: In cases in which the Bank sets the lower limit of the desired yield spread, the yield shall be the same or higher than the yield spread calculated by adding this lower limit of the desired yield spread to the benchmark yield.
  2. b. Fixed-rate method
    Desired sale amount per issue, and the total amount.

2. For floating-rate bonds and inflation-indexed bonds:

Desired sale amount and price per issue, and the total amount.

C. Acceptance of bids (notification of respective results to auction participants)

The Bank, after receiving bids as described in subsection B, accepts bids as follows. However, the Bank reserves the right to reject all or some of bids which a counterparty submits when deemed appropriate.

1. For JGBs with coupons excluding floating-rate bonds and inflation-indexed bonds:

  1. a. Competitive auction method
    The Bank accepts bids by starting with the highest desired yield spread without distinguishing between issues and continuing down until the total amount of bids accepted reaches the amount offered.
  2. b. Fixed-rate method
    The Bank accepts bids based on the desired sale amount notified by the auction participants as described in subsection B. (However, the Bank may set an upper limit on the purchase amount. )

2. For floating-rate bonds and inflation-indexed bonds:

The Bank accepts bids by starting with the lowest desired price spread without distinguishing between issues and continuing up until the total amount of bids accepted reaches the amount offered.


When accepting bids, the Bank, through the BOJ-NET, notifies auction participants who submitted bids as described in subsection B of the following matters. Here and hereinafter, those who receive such notifications will be referred to as sellers.

1. For JGBs with coupons excluding floating-rate bonds and inflation-indexed bonds:

  1. a. Competitive auction method
    Amount and yield at which the Bank will purchase and the purchasing price per issue.
  2. b. Fixed-rate method
    Amount at which the Bank will purchase and the purchasing price per issue.

2. For floating-rate bonds and inflation-indexed bonds:

Amount and price at which the Bank will purchase and the purchasing price per issue.

IV. Purchases of JGBs

On the purchase date notified in subsection III. A, the seller delivers JGBs to the Bank simultaneously with the Bank's payment of the purchasing price to the seller.

V. Operation Timetable

Please refer to the "Operation Timetable" for the timetable of operations described in section III and IV.

VI. Outright Purchases of JGBs

Please refer to the "Outline of Outright Purchases of Japanese Government Securities" (released on April 28, 2022) [PDF 268KB] for the Bank's outline of outright purchases of JGBs.