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An amendment to "Principal Terms and Conditions for the Outright Purchase/Sale of Japanese Government Bonds"

January 16, 2002
Bank of Japan

At the Monetary Policy Meeting held today, the Policy Board of the Bank of Japan decided to amend"Principal Terms and Conditions for the Outright Purchase/Sale of Japanese Government Bonds" (Policy board Decision on March 25, 1999) as shown inAttachment 1. This decision will expand the range of bonds to be purchased/sold, reflecting the recent developments to improve the primary and secondary markets for government bonds.

(See Attachment 2 for the full text of the amended"Principal Terms and Conditions for the Outright Purchase/Sale of Japanese Government Bonds".)

Attachment 1

An amendment to "Principal Terms and Conditions for the Outright
Purchase/Sale of Japanese Government Bonds"

  • Paragraph 4 shall be amended as below.

4. Bonds to be Purchased/Sold

Interest bearing Japanese government bonds issued more than a year ago(as for those issued not more than a year ago, the latest 2 issues of each maturity are excluded).

(Supplementary Provision)

This amendment shall become effective as from January 17, 2002.

Attachment 2

Principal Terms and Conditions for the Outright Purchase/Sale of
Japanese Government Bonds

1. Purpose

These Principal Terms and Conditions prescribe the principles that are necessary for the Bank of Japan's outright purchase/sale of Japanese government bonds without repurchase agreements with the aim of facilitating money market operations.

2. Location of Purchases/Sales

At the Head Office (Operations Department) of the Bank.

3. Eligible Counterparties

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 the Kii Deposits Management Bank), 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).

4. Bonds to be Purchased/Sold

Interest bearing Japanese government bonds (as for those issued not more than a year ago, the latest 2 issues of each maturity are excluded).

5. Purchasing/Selling Method

Bonds shall be purchased/sold through competitive yield auction.

6. Purchasing/Selling Price

The purchasing/selling price shall be decided based on the interest rate determined by competitive yield auction.

7. Dates for Purchase/Sale, Amount of Bonds to be Purchased/Sold, etc.

Taking into account the prevailing situations in financial markets, the Bank shall determine specifications necessary for purchases/sales, including dates, amount of bonds to be purchased/sold, and counterparties, for each purchase/sale.