What’s New ⇒ Central Government Debt (As of September 30, 2016) Monthly Topic ⇒ 1 Quarterly Estimates of GDP Jul.-Sep. 2016

2 Latest overview on Abenomics released (Nov 11.)

WHAT’S NEW

Central Government Debt (As of September 30, 2016)

On November 10, the MOF released the update on central government debt. Debt outstanding and composition as of the end of September 2016 are as follows.

Outstanding government bonds and borrowings increased by 9.1 trillion

yen to 1,062.6 trillion yen from the end of June (1,053.5 trillion yen). This is because the total for general bonds increased by 8.7 trillion yen.

The Ministry of Finance www.mof.go.jp

The end of September 2016

(Actual)

The end of March 2017 (Estimate)

1) Outstanding Government Bonds and Borrowings

① General Bonds 825.5 844.3

② Fiscal Investment and Loan Program Bonds (FILP Bonds) 92.0 96.3

③ Borrowings, Subsidy Bonds, etc. 62.4 62.7

④ Financing Bills (FBs) 82.7 116.1

Total 1,062.6 1,119.3

2) Outstanding Government-Guaranteed Debts

Government-Guaranteed Debts 40.5 -

Monthly Newsletter of the Ministry of Finance, Japan JAPANESE GOVERNMENT BONDS

Dec. 2016 Contents 1. What’s New

Monthly Topic IR Special Office

…P.1 2. JGB Primary

Market …P.4

3. The Auctions for

Enhanced-Liquidity and JGB Buy-Back

…P.5 4. JGB Secondary

Market …P.6

5. Investor Trends and

JGB Outstanding …P.8

6. Economic and

Financial Trends …P.12

7. Information

…P.13

This Month’s Special!

(trillion yen)

Notes: 1. Figures may not sum up to the total because of rounding. 2. Above "Outstanding Government Bonds and Borrowings" includes government

bonds and borrowings held by government. 3. Figures are total of the general account and all special accounts, and the

coverage is different from the central government defined in SNA. 4. The data as of December 31, 2016 will be released on February 10, 2017. 5. Figures for "Outstanding Government-Guaranteed Debts" are blank, because

these are not estimated in formulating the budget. Details: http://www.mof.go.jp/english/jgbs/reference/gbb/e201609.html

WHAT’S NEW

<Main Points>

1. Quarterly Estimates of GDP Jul.- Sep.2016

The first preliminary GDP estimate (Jul – Sep 2016) was released on Nov 14. Real GDP expanded by 0.5% (annual rate 2.2%) from the previous quarter. The strong growth was driven by foreign demand, which contributed 0.5 % points. By demand item, Private Residential Investment rose by 2.3% and Government

Consumption rose by 0.4% from the previous quarter, while Private Consumption showed slight growth, up 0.1% from the previous quarter.

2. Latest overview on Abenomics released (Nov 11.)

An up-to-date overview on the progress in Abenomics was released on the government website on November 11 (please see the link below). The material offers the latest on the reforms being implemented to reach a GDP of 600 trillion yen, including work style reform to raise productivity and increase the workforce in the midst of demographic changes.

Link to the Government of Japan website: http://www.japan.go.jp/abenomics/html/

*Material available in both HTML and PDF format.

(％)2016

7～9 10～12 1～3 4～6 7～90.4 -0.4 0.5 0.2 0.5 *** 2.20.4 -0.5 0.4 0.3 0.1 *** 0.4

(0.4) (-0.5) (0.4) (0.3) *** (0.1) ***0.5 -0.6 0.3 0.4 0.1 (0.0) 0.20.5 -0.8 0.7 0.1 0.1 (0.0) 0.20.5 -0.9 0.7 0.1 0.0 (0.0) 0.2

Excluding imputed Rent 0.6 -1.1 0.8 0.1 -0.0 (-0.0) -0.01.2 -0.4 -0.3 5.0 2.3 (0.1) 9.60.8 1.2 -0.7 -0.1 0.0 (0.0) 0.1

(-0.0) (-0.1) (-0.1) (0.1) *** (-0.1) ***-0.0 -0.1 0.8 0.1 0.2 (0.0) 0.80.3 0.6 0.9 -0.3 0.4 (0.1) 1.7

-1.2 -3.4 0.0 2.3 -0.7 (-0.0) -2.7(-0.0) (0.0) (0.0) (-0.0) *** (-0.0) ***(-0.0) (0.1) (0.1) (-0.2) *** (0.5) ***

Change in Public Inventory Net Exports of Goods & Services

2015 2016

Private Non-Resi. InvestmentChange in Private Inventory

Public DemandGovernment ConsumptionPublic Investment

Domestic Demand

Private DemandPrivate Consumption

Consumption of Households

Private Residential Investment

7～9

Gross Domestic Product

MONTHLY TOPIC

－2－

0.9

-0.4 -0.5-0.0

1.00.7

0.4

-0.0

1.3

-2.0

-0.7

0.6

1.2

-0.3

0.4

-0.4

0.5 0.2 0.5

-3.5

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ

2012 2013 2014 2015 2016

(％)

Private Demand Public DemandForeign Demand Real GDP

Contributions to change from the previous quarter (Seasonally adjusted)

Note1: Change from the previous quarter (seasonally adjusted) Note2: Annual rate Note3: The Figures in () indicate contributions to Changes in GDP. Source: Cabinet Office, Government of Japan

Development of Real GDP (Quarterly, seasonally adjusted series)

Source: Cabinet Office, Government of Japan

Note1

Note2

At the beginning of November, Mr. Ichikawa, deputy director-general of the Financial Bureau, made a presentation to more than 100 foreign and domestic investors at a private investment seminar in Tokyo. The theme of his presentation was “Policy Framework and Public Debt Management of Abenomics 2.0.” He described the new policy framework that the Japanese government is constructing under the current economic environment. He stated that the growth strategy, including working style reform and strategic investment, has become the main engine for the new Abenomics. He also emphasized that the Japanese government is seeking the best policy mix of fiscal and monetary policies, which is clearly distinct from helicopter money and monetization of fiscal deficit. In addition, he explained the basic framework and current consideration of public debt management.

Just around the same time, the IR Special Office members visited Hong Kong, Manila,

Paris and London to have meetings with overseas investors. They had informative conversations with overseas investors, and felt their strong interest toward the progress of Abenomics as well as our debt management policy after BOJ’s new framework “QQE with Yield curve control”. We would like to express our gratitude to our investors for taking their precious time to meet us, especially in Paris and London since it was a very busy time in the global market soon after the US election.

During the IR tour of Asia, Ms. Kimata, director for debt management and JGB investor

relations, and Mr. Shodai, assistant manager, also joined the ADB’s 2016 Regional forum on investment management of foreign exchange reserves in Manila. Participants discussed how to manage their foreign exchange reserves under the global low yield including negative interest rates. Ms. Kimata explained Japanese debt management from the perspective of issuance.

During the IR Europe tour, Mr. Miyoshi, director of the International Organizations Division,

Ms. Kimata, and Mr. Inada, official, participated in the OECD Working Party on Debt Management. Debt managers from OECD member countries actively exchanged views on how to steer policy under the current low yield environment and asset purchases by central banks, and many more topics. Mr. Miyoshi contributed to the discussion by leading a session and making presentations on our bond markets and investor base.

These international conferences provide a good opportunity to strengthen the

international partnership with other countries and to develop better debt management.

IR SPECIAL OFFICE

If you have any questions regarding the contents of this newsletter, please do not hesitate to contact us at: JGB-IR@mof.go.jp

－3－

Auction Results

（Bonds）

Auction Date Type of Security Issue Number Maturity Date Nominal

Coupon

Amounts of Competitive

Bids (billion yen)

Amounts of Bids

Accepted (billion yen)

Yield at the Lowest

Accepted Price

Yield at the Average

Price

Amounts of Non-Competitive Bids Tendered

/Accepted (billion yen)

Amounts of Bids Accepted at the

Non-price- competitive Auction Ⅰ (billion yen)

Amounts of Bids Accepted at the

Non-price- competitive Auction Ⅱ (billion yen)

9/1/2016 10-year 344 9/20/2026 0.1% 8,126.7 2,173.5 ▲0.044% ▲0.046% 1.445 224.2 0.0 9/6/2016 30-year 52 9/20/2046 0.5% 2,271.6 725.3 0.507% 0.500% - 74.2 27.6 9/8/2016 5-year 129 9/20/2021 0.1% 6,607.2 2,178.2 ▲0.173% ▲0.175% - 221.0 0.0 9/13/2016 20-year 158 9/20/2036 0.5% 3,322.3 996.9 0.442% 0.437% - 102.1 152.0 9/27/2016 40-year 9 3/20/2056 0.4% 1,363.3 499.4 0.560% - - - 32.7 9/29/2016 2-year 369 10/15/2018 0.1% 7,927.9 2,097.5 ▲0.254% ▲0.263% - 202.2 30.5 10/4/2016 10-year 344 9/20/2026 0.1% 8,288.3 2,170.9 ▲0.056% ▲0.058% 0.997 227.3 356.1 10/6/2016 10-year Inflation-Indexed Bonds 21 3/10/2026 0.1% 1,282.6 399.9 ▲0.391% - - - 25.2 10/12/2016 30-year 52 9/20/2046 0.5% 2,634.7 722.9 0.519% 0.514% - 76.3 118.9 10/14/2016 5-year 129 9/20/2021 0.1% 9,375.8 2,175.1 ▲0.201% ▲0.201% - 224.2 358.5 10/25/2016 20-year 158 9/20/2036 0.5% 3,455.8 990.6 0.367% 0.364% - 108.8 115.9 10/27/2016 2-year 370 11/15/2018 0.1% 9,188.8 2,084.5 ▲0.235% ▲0.237% - 214.8 314.6 11/8/2016 10-year 344 9/20/2026 0.1% 9,422.1 2,165.7 ▲0.055% ▲0.056% 1.167 232.5 358.7 11/10/2016 30-year 52 9/20/2046 0.5% 2,526.7 722.2 0.519% 0.511% - 76.6 0.0 11/15/2016 5-year 129 9/20/2021 0.1% 7,722.5 2,169.0 ▲0.150% ▲0.160% 0.100 230.6 0.0 11/17/2016 20-year 158 9/20/2036 0.5% 3,169.4 999.3 0.477% 0.456% - 100.2 131.8 11/25/2016 40-year 9 3/20/2056 0.4% 1,488.1 499.7 0.725% - - - 74.1

Auction Results （Treasury Discount Bills）

Auction Date Type of Security Issue Number Maturity Date

Amounts of Competitive Bids

(billion yen)

Amounts of Bids Accepted

(billion yen)

Yield at the Lowest

Accepted Price

Yield at the Average

Price

Amounts of Bids Accepted at the

Non-price- competitive Auction Ⅰ (billion yen)

9/1/2016 3-month 630 12/5/2016 15,572.36 4,051.92 ▲0.2304% ▲0.2425% 388.00 9/7/2016 6-month 631 3/10/2017 12,167.90 3,173.07 ▲0.2566% ▲0.2769% 326.90 9/8/2016 3-month 632 12/12/2016 15,217.50 3,970.35 ▲0.2645% ▲0.2817% 409.60 9/14/2016 1-year 633 9/20/2017 9,977.50 2,276.38 ▲0.3219% ▲0.3398% 223.60 9/15/2016 3-month 634 12/19/2016 16,614.90 3,992.77 ▲0.3363% ▲0.3549% 407.20 9/20/2016 3-month 635 12/26/2016 12,908.80 3,975.36 ▲0.3066% ▲0.3286% 404.60 9/29/2016 3-month 636 1/10/2017 12,824.30 4,054.97 ▲0.3407% ▲0.3547% 375.00 10/5/2016 6-month 637 4/10/2017 13,299.30 3,176.27 ▲0.3643% ▲0.3743% 323.70 10/6/2016 3-month 638 1/16/2017 15,985.40 3,992.38 ▲0.3120% ▲0.3274% 387.60 10/13/2016 3-month 639 1/23/2017 14,882.75 3,947.27 ▲0.2735% ▲0.2925% 402.70 10/18/2016 1-year 640 10/20/2017 10,591.60 2,269.29 ▲0.3080% ▲0.3219% 230.70 10/20/2016 3-month 641 1/30/2017 16,525.90 3,986.37 ▲0.2493% ▲0.2545% 393.60 10/27/2016 3-month 642 2/6/2017 14,948.30 3,981.97 ▲0.2456% ▲0.2568% 398.00 11/2/2016 3-month 643 2/13/2017 15,015.30 3,991.43 ▲0.2568% ▲0.2623% 408.50 11/8/2016 6-month 644 5/12/2017 13,692.50 3,171.37 ▲0.2947% ▲0.3066% 328.60 11/10/2016 3-month 645 2/20/2017 15,031.00 3,982.56 ▲0.2661% ▲0.2765% 387.40 11/16/2016 1-year 646 11/20/2017 8,434.10 2,279.69 ▲0.2500% ▲0.2749% 220.30 11/17/2016 3-month 647 2/27/2017 14,561.95 3,977.15 ▲0.2716% ▲0.2891% 392.80 11/24/2016 3-month 648 3/6/2017 14,671.40 4,015.14 ▲0.2754% ▲0.2873% 404.80

Auction Calendar for Nov. 2016 – Jan. 2017 Auction Date Issue Auction Date Issue Auction Date Issue Auction Date Issue 11/2(Wed) T-Bills (3-month) 11/25(Fri) 40-year 12/21(Wed) T-Bills (3-month) 1/19(Thu) 5-year 11/2(Wed) Auctions for Enhanced-liquidity 11/29(Tue) 2-year 12/21(Wed) Auctions for Enhanced-liquidity 1/24(Tue) 40-year 11/8(Tue) T-Bills (6-month) 12/1(Thu) T-Bills (3-month) 12/27(Tue) 2-year 1/26(Thu) T-Bills (3-month) 11/8(Tue) 10-year 12/1(Thu) 10-year 1/5(Thu) T-Bills (3-month) 1/26(Thu) Auctions for Enhanced-liquidity

11/10(Thu) T-Bills (3-month) 12/6(Tue) Auctions for Enhanced-liquidity 1/5(Thu) 10-year 1/30(Mon) 2-year

11/10(Thu) 30-year 12/7(Wed) T-Bills (6-month) 1/6(Fri) T-Bills (6-month)

11/15(Tue) 5-year 12/8(Thu) T-Bills (3-month) 1/11(Wed) 30-year 11/16(Wed) T-Bills (1-year) 12/8(Thu) 30-year 1/12(Thu) T-Bills (3-month) 11/17(Thu) T-Bills (3-month) 12/13(Tue) 5-year 1/13(Fri) Auctions for Enhanced-liquidity 11/17(Thu) 20-year 12/15(Thu) T-Bills (3-month) 1/17(Tue) 20-year 11/22(Tue) Auctions for Enhanced-liquidity 12/15(Thu) 20-year 1/18(Wed) T-Bills (1-year) 11/24(Thu) T-Bills (3-month) 12/16(Fri) T-Bills (1-year) 1/19(Thu) T-Bills (3-month)

Top 10 PDs by Total Purchase in Auctions (Calculated by Duration) (Apr. 2016 ～ Sep. 2016) 1 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. 6 SMBC Nikko Securities Inc. 2 Nomura Securities Co., Ltd. 7 BNP Paribas Securities (Japan) Limited 3 Daiwa Securities Co. Ltd. 8 Deutsche Securities lnc. 4 Mizuho Securities Co., Ltd. 9 Goldman Sachs Japan Co., Ltd. 5 Merrill Lynch Japan Securities Co., Ltd. 10 Morgan Stanley MUFG Securities Co., Ltd.

2 JGB PRIMARY MARKET

Note.1: The above calendar may be changed or added in light of changes in circumstances. In such cases, it will be announced in advance. Note.2: Each issue amount will be announced about one week prior to each auction date.

－4－

(Until 25 November 2016)

(Until 25 November 2016)

Results of Auctions for Enhanced-Liquidity

Auction Date

Amounts of Competitive

Bids (billion yen)

Amounts of Bids

Accepted (billion yen)

Average Accepted Spread

Highest Accepted Spread

Issues Re-opened

9/15/2016 978.2 199.9 ▲0.033% ▲0.026%

2-year(357,361) 5-year(107) 10-year(301,315) 20-year(38,43,51)

9/23/2016 1,590.6 499.5 ▲0.031% ▲0.023% 10-year(319,320,321,325,336) 20-year(73,75,85,88,89,93,99,100,101,105,106,107,110,111,113,116,117,120,122,123, 124,125,126,127,128,129,130,131,132,133)

10/18/2016 1,074.3 398.8 +0.001% +0.005% 20-year(137,139,147,150,157) 30-year(7,13,16,17,19, 20,21,22,25,26,28,29,30,31,32,33,34,35,36,37,38,41,43,48,49,50,51) 40-year(1,2,3,4,6,8)

10/20/2016 1,851.3 499.6 ▲0.015% ▲0.011% 20-year(87,88,89,106,107,108,110,120,125)

11/2/2016 986.9 199.5 ▲0.016% ▲0.013% 2-year(358) 10-year(290,291,292,294,298,299,301,302,303,304,308,315,316) 20-year(45,49,51)

11/22/2016 1,561.2 497.8 ▲0.014% ▲0.012%

10-year(319,320,321,325,328,329, 332,333,336,338) 20-year(65,66,68,69,70,71,72,73,75,76,77,85,86,87,88,89,90,91,92,93,94,95,98, 103,115,117,125,129) 30-year(2,4,5)

Target Zones of the Auction for Enhanced-Liquidity for the Third Quarter of FY 2016

10-year Inflation-Indexed

Auction Date Amounts of

Competitive Bids (billion yen)

Amounts of Bids Accepted

(billion yen)

Average Accepted

Spread (yen)

Highest Accepted

Spread (yen) Issue Numbers

8/17/2016 90.9 20.1 ▲0.267 ▲0.160 17,18,20,21 10/13/2016 112.7 20.0 ▲0.402 ▲0.300 17,21

3 THE AUCTIONS FOR ENHANCED-LIQUIDITY AND JGB BUY-BACK

①Remaining maturity : approx.1‐～5‐year

③Remaining maturity : approx.15.5‐～39‐year

Note.1： JN shows 2‐year JGBs. JS shows 5‐year JGBs. JL shows 20‐year JGBs. JX shows 30‐year JGBs. JU shows 40‐year JGBs. Outstanding amount is as of the end of September 2016. Note.2： All issues in the graph above will be eligible afterward.

Buy-back Results

(Until 25 November 2016)

(Until 31 October 2016)

－5－

②Remaining maturity : approx.5‐～15.5‐year

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0006,5007,0007,500

JN35

8

JN35

9

JS10

7

JS10

8

289

JN36

0

JN36

1

JN36

2

JS10

9

JS11

0

JS11

1

290

291

292

JL38

JL39

JN36

3

JN36

4

JN36

5

JS11

2

JS11

3

293

294

295

JN36

6

JN36

7

JN36

8

JS11

4

JS11

5

296

JL40

JS11

6

297

298

JS11

7

299

300

JL41

JL42

JS11

8

JS11

9

301

302

JS12

0

JS12

1

303

304

JL43

JS12

2

305

JS12

3

306

307

JL44

JL45

JS12

4

308

309

JL46

JS12

5

310

311

JL47

JS12

6

312

JL48

JS12

7

313

314

JL49

JL50

JS12

8

315

316

JL51 31

7

318

JL52

Amount issued by the Auction for Enhanced-liquidity Outstanding amount in the market (excluding amount issued by the Auction for Enhanced-liquidity)

1 2 5

(Remaining maturities)

（billion yen)

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0006,5007,0007,500

319

320

JL53

JL54 32

132

2JL

55 323

324

JL56

JL57 32

5JL

58 326

327

JL59

JL60 32

8JL

61 329

JL62

JL63 33

033

1JL

64 332

JL65

JL66 33

3JL

67JL

68JL

69 334

JL70

JL71 33

5JL

72 336

337

JL73

JL74 33

8JL

75JL

76JL

77 339

JL78

JL79

JL80 34

0JL

81JL

82 341

JL83

JL84 34

2JL

85JL

86JL

87 343

JL88

JL89

JL90

JL91

JL92

JL93

JL94

JL95

JL96

JL97

JL98

JL99

JL10

0JL

101

JL10

2JL

103

JL10

4JL

105

JL10

6JL

107

JL10

8JL

109

JL11

0JL

111

JL11

2JL

113

JX1

JL11

4JL

115

JX2

JL11

6JL

117

JX3

JL11

8JL

119

JL12

0JL

121

JL12

2JX

4JL

123

JL12

4JL

125

JL12

6JL

127

JX5

JL12

8JL

129

JL13

0JL

131

JX6

JL13

2JL

133

JL13

4JL

135

JL13

6

Amount issued by the Auction for Enhanced-liquidity Outstanding amount in the market (excluding amount issued by the Auction for Enhanced-liquidity)

5 10 15.5

(Remaining maturities)

（billion yen)

0500

1,0001,5002,0002,5003,0003,5004,000

JX7

JL13

7JL

138

JL13

9JL

140

JX8

JL14

1JL

142

JX9

JL14

3JL

144

JX10

JL14

5JX

11JL

146

JX12

JL14

7JX

13JL

148

JX14

JL14

9JX

15JL

150

JX16

JL15

1JX

17JL

152

JX18

JL15

3JX

19JL

154

JX20

JL15

5JX

21JL

156

JX22

JL15

7JX

23JX

24JX

25JX

26JX

27JX

28JX

29JX

30JX

31JX

32JX

33JX

34JX

35JX

36JX

37JX

38JX

39JX

40JX

41JX

42JX

43JX

44JX

45JX

46JX

47JX

48JX

49JX

50JX

51JU

1JU

2JU

3JU

4JU

5JU

6JU

7JU

8

Amount issued by the Auction for Enhanced-liquidity Outstanding amount in the market (excluding amount issued by the Auction for Enhanced-liquidity)（billion yen)

(Remaining maturities)15.5 20 39

-1%

0%

1%

2%

3%

4%

5%

Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

Japan United States

United Kingdom Germany

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

2-year bond 5-year bond 10-year bond

20-year bond 30-year bond 40-year bond

-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

0%

1%

2%

3%

4%

5%

6%

7%

8%

Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16

Volatility Yield (right scale)

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2015/6/302015/9/302015/12/302016/8/312016/9/302016/10/31

40353020 25151050

Note: BEI (Japan : old JGBi) is calculated based on the compound interest rate of the old Inflation-Indexed Bonds (issue number 16 with current maturity of 1 years and 8months) and the 10-Year Bonds (issue number 293 with current maturity of 1 years and 8months). BEI (Japan : 10 year) is calculated based on the compound interest rate of the new Inflation-Indexed Bonds and the 10-Year Bonds.

Source: Japan: Calculation by the Ministry of Finance based on the information on interest rates offered by NIKKEI QUICK U.S.A., U.K. : Bloomberg

4 JGB SECONDARY MARKET JGB Yield Curves

Source: Japan Bond Trading Co.,Ltd.

Yields of JGB

Long - Term Interest Rates （10Yr） Source: Bloomberg

Source: Bloomberg

－6－

Yield and Volatility (10Yr)

Break-Even Inflation Rates

Source: Bloomberg, Calculation by the Ministry of Finance

(Until 31 October 2016)

(Until 31 October 2016)

(Until 31 October 2016)

(Until 31 October 2016)

-3%

-2%

-1%

0%

1%

2%

3%

4%

Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

BEI (Japan : old JGBi) BEI (Japan : 10 year)

BEI (U.K. : 10 year) BEI (U.S.A. : 10 year)

0

500

1,000

1,500

2,000

2,500

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

Bond-Lending

Bond-Gensaki

0

20

40

60

80

100

120

140

160

180

200

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

Treasury Discount Bills

Medium Term Bonds

Long Term Bonds

Short-Term Interest Rates

Source: Bank of Japan; Japanese Banker Association

JGB Over-the-Counter Trading Volume (TOKYO)

Trading Volume of 10-Year JGB Futures

Repurchase Transactions

－7－

Source: Japan Securities Dealers Association

Source: Tokyo Stock Exchange (until Mar.2014), Osaka Exchange (from Apr. 2014)

Source: Japan Securities Dealers Association

(trillion yen)

(trillion yen)

(trillion yen)

(Until 31 October 2016)

-0.1%

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

Call Rate (Uncollateralized Overnight)

TIBOR 3-months (Euro-Yen)

Basic Loan Rate

－8－

0

50

100

150

200

250

300

350

400

450

500

Apr-12 Sep-12 Feb-13 Jul-13 Dec-13 May-14 Oct-14 Mar-15 Aug-15 Jan-16 Jun-16

Total Assets

Monetary Base

JGBs

QQE2QQE（trillion yen）Apr 2013(Actual)

Oct 2016(Actual)

Monetary Base 155 418

JGBs 98 348

CP 1.4 2.1

Corporate Bonds 2.9 3.2

ETFs 1.7 10.2

J-REITs 0.13 0.34

Total Assets 175 463

0

10

20

30

40

50

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

180190200210220230240

0

20

40

60

80

100

120

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

160

180

200

Super long-term

Long-term

Medium-term

T-bills

-9.0

-7.0

-5.0

-3.0

-1.0

1.0

3.0

5.0

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct

City Banks

Net Purchase

Net Sale

2013 2014 2015 2016

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct

Regional banks

Net Purchase

Net Sale

2013 2014 2015 2016

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct

Life and non-life insurance companies

Net Purchase

Net Sale

2013 2014 2015 2016

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct

Foreigners

Net Purchase

Net Sale

2013 2014 2015 2016

(unit: trillion yen)(unit: trillion yen)

(unit: trillion yen) (unit: trillion yen)

Trends in Bank Assets by Types

5 INVESTOR TRENDS AND JGB OUTSTANDING Trends in JGBs Transactions (by investor type)

BOJ Trends

Regional Banks City Banks

Source: Bank of Japan

(trillion yen) (trillion yen)

Loans

Cash and Deposits

Government Bonds

Municipal Bonds

Corporate Bonds

Equities

Foreign Securities

Source: Bank of Japan

Source: Japan Securities Dealers Association

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

City Banks Trust Banks Insurance Companies Foreigners

-5

-4

-3

-2

-1

0

1

2

3

4

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

Short-term debt securities Long-term debt securities Equity and investment fund shares

Net

Purchase

Net

Sales

-1

-0.5

0

0.5

1

1.5

2

2.5

3

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

Short-term debt securities Long-term debt securities Equity and investment fund shares

Net

Purchase

Net

Sales

-8

-6

-4

-2

0

2

4

6

8

10

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

Short-term debt securities Long-term debt securities Equity and investment fund shares

Net

Purchase

Net

Sales

59.2

63.3 67.9

55.2 55.6

55.0 52.2 49.3 46.4

52.1

58.1 56.5

61.8 67.8

77.0 78.3 76.6 81.8

86.1

82.6 81.9

81.7 78.9

83.8 81.5

84.0 87.2

93.0 97.7

94.9

100.5

108.4

109.7 110.6

7.4

8.0

8.6

6.9

7.0 6.8 6.4

6.0 5.6

6.0

6.6 6.4

7.1 7.5

8.4 8.5 8.3 8.7 9.1

8.6 8.5 8.4 8.1

8.5 8.2 8.3

8.6 9.1

9.4 9.2

9.7

10.5 10.2

10.0

20

40

60

80

100

120

1

2

3

4

5

6

7

8

9

10

11

Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

Amount of JGB Holdings (right)

Proportion of JGB Holdings (left)

(trillion yen)

%

%

%

%

%

%

%

%

%

%

%

10.0%

30.2%

48.7%

0%

10%

20%

30%

40%

50%

60%

Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16

①Market Share of Foreign Investors (JGB Futures Market)

②Market Share of Foreign Investors (JGB Market)

③JGB Holdings by Foreign Investors

－9－

JGBs Holdings by Foreign Investors

Banks(Banking Accounts) Life Insurance Companies

Transactions of Domestic Securities by Non-Residents

Note: “JGB” includes T-Bills. Source: Bank of Japan

Source: Ministry of Finance Source: Japan Securities Dealers Association

Outstanding of Repurchase Agreements (by Investor types)

Transactions of Foreign Securities by Residents (by Investor types)

Source: Ministry of Finance

Foreign Investors Presence

Note.1: Quarterly basis. Note.2: “JGB” includes T-Bills. The figures of ②excludes dealers’ transactions. Source: Bank of Japan, Japan Securities Dealers Association, Tokyo Stock Exchange,

Osaka Exchange

(trillion yen)

(trillion yen)

(trillion yen)

Source: Ministry of Finance

JGB and T-Bill Holders

－10－

Breakdown by JGB and T-Bill Holders (Jun. 2016)

Source: Bank of Japan “Flow of Funds Accounts (Preliminary Figures)”

Note.1: "JGB" includes FILP Bonds. "T-Bill" is the sum of "Treasury Bills (TBs)" and "Financial Bills (FBs)" with a maturity of 1 year or less and TBs and FBs have been jointly issued since February 2009.

Note.2: "Banks, etc." includes "Japan Post Bank", "Securities investment trust" and "Securities Companies". Note.3: "Life and Nonlife insurance" includes Japan Post Insurance.

(trillion yen)

Breakdown of Outstanding Amount of General Bonds by Remaining Years to Maturity

T-Bill Holders

Total 118.0 trillion yen

JGB Holders

Total 987.4 trillion yen

Total 1,105.4 trillion yen

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

800

850

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

20.3% 18.6% 17.0% 17.8% 18.3% 18.2% 17.9% 17.3% 16.4% 15.1%

12.8% 11.5% 11.4%13.0% 12.5% 11.9% 12.4% 12.0% 11.1% 10.6%

8.3%8.2% 8.9%

8.5% 7.9% 8.6% 8.1% 7.8% 7.8% 7.9%8.3% 9.0% 9.2%8.4%

9.0% 8.6% 8.1% 8.1% 8.2% 7.8%8.5% 8.6% 8.4%

8.8%8.4% 7.8%

7.8% 7.8% 7.4% 7.8%

4.2% 4.6% 5.3%

5.2%4.7%

4.9%4.4% 4.2% 5.0% 4.2%

4.8% 5.6% 5.6%

4.9%5.2%

4.6%4.5%

5.0% 4.3% 4.4%

5.8% 6.0% 5.5%

5.5%4.8%

4.8%5.3%

4.5% 4.5% 5.0%

6.3% 5.9% 6.2%

5.2%5.1%

5.6%4.7%

4.8% 5.2% 4.9%

5.4% 5.5% 5.0%

4.7%5.2%

4.4%4.3%

4.6% 4.2% 4.5%

13.8% 14.5% 14.8%

14.4%

14.4%14.9%

15.6%16.5%

17.7%18.4%

1.6% 2.0% 2.7%

3.6%

4.6%

5.8%

6.7%

7.5%8.3%

9.4%

20 yrs-

10-20 yrs

9-10 yrs

8-9 yrs

7-8 yrs

6-7 yrs

5-6 yrs

4-5 yrs

3-4 yrs

2-3 yrs

1-2 yrs

-1 yr

（trillion yen）

（at the end of FY）

531.7 541.5 545.9594.0

636.3

669.9

705.0

743.9

774.1

*years to maturity

805.4

Average

YTM* 5Y9M 6Y1M 6Y3M 6Y5M 6Y8M 7Y0M 7Y3M 7Y7M 8Y0M 8Y5M

Average YTM*

(excluding saving

bonds)5Y8M 6Y1M 6Y4M 6Y6M 6Y10M 7Y1M 7Y5M 7Y8M 8Y0M 8Y5M

General

Government(ex Public Pensions)

2.5

0.2% Fiscal Loan Fund

0.0

0.0%

BOJ

397.7

36.0%

Banks,etc.

264.5

23.9%

Life and Non-life

Insurance

218.9

19.8%

Public Pensions

52.4

4.7%

Pension Funds

34.3

3.1%

Foreigners

110.6

10.0%

Households

14.0

1.3%

Others

10.6

1.0%

General

Government

(ex Public Pensions)

2.5

0.2%Fiscal Loan Fund

0.0

0.0%

BOJ

344.9

34.9%

Banks,etc.

257.5

26.1%

Life and Non-life

Insurance

216.7

21.9%

Public Pensions

52.4

5.3%

Pension Funds

34.3

3.5%

Foreigners

54.7

5.5%

Households

14.0

1.4%

Others

10.6

1.1%

General

Government

(ex Public Pensions)

0.0

0.0%

Fiscal Loan Fund

0.0

0.0%

BOJ

52.8

44.8%

Banks,etc.

7.0

6.0%

Life and Non-life

Insurance

2.3

1.9%

Public Pensions

0.0

0.0%

Pension Funds

0.0

0.0%

Foreigners

55.9

47.4%

Households

0.0

0.0%

Others

0.0

0.0%

Types The amount of redemption at maturity Scheduled redemption date

15-Year Floating-Rate Bonds 579.1 December 20

10-Year Bonds 9,443.4 December 20

10-Year Inflation-Indexed Bonds 272.2 December 10

5-Year Bonds 8,094.8 December 20

2-Year Bonds 2,699.5 December 15

Treasury Bill 4,641.9 December 20

Total 25,730.8

Source: Ministry of Finance

Time-to-Maturity Structure of Outstanding JGB（Sep. 2016）

General Bonds Issuance Amount and Outstanding

Note 1: Issuance Amount: revenue basis, FY2004-2015: actual, FY2016 initial budget Note 2: Outstanding: nominal basis, FY2003-2015: actual, FY2016: estimates Source: Ministry of Finance

Market-held Balance of the Inflation-Indexed Bonds (as of October 31, 2016)

(trillion yen)

Scheduled redemption of JGB at maturity in December 2016

Note.1: The figures are based on the outstanding JGBs at the end of October, 2016. Note.2: The figures are the scheduled redemption at maturity and may be different from the actual redemption due to Buy-back of JGBs. Note.3: About Inflation-Indexed Bonds, the amount of redemption at maturity is adopted the inflation-adjusted principal as of October 31, 2016. Note.4: The figures do not include "JGB for Retail Investors". Note.5: If the redemption date coincides with bank holiday, the payment of redemption is carried out on the following business day. Note.6: Figures may not sum up to total because of rounding.

(billion yen)

－11－

Source: Ministry of Finance, Bank of Japan

499.0526.9 531.7 541.5 545.9

594.0636.3

669.9705.0

743.9 774.1 805.4837.8119.9

136.8 135.6 124.6 127.1

142.4 143.1

163.1 163.3 153.6 158.0 150.5

145.7

100

200

300

400

500

600

700

800

900

0

30

60

90

120

150

180

04 05 06 07 08 09 10 11 12 13 14 15 16

Outstanding (right-hand scale) Issuance Amount (left-hand scale)

0100200300400500600700800900

1,0001,1001,2001,3001,4001,5001,6001,7001,8001,9002,0002,1002,200

10 11 12 13 14 15 16 17 18 19 20 21

(billion yen)

(issue number)

Outstanding amount (excl. BOJ holding)

BOJ holdingOld type

(without floor)

62.21

102.92

76.83

63.1268.44

44.72

35.8239.7839.28

42.06

20.00

10.5711.5814.2015.9115.4817.8817.9019.7918.95

9.343.75 4.68 5.25 6.25 6.60 6.00 8.06 9.36 10.58

3.350.81 1.28 1.30 1.92 1.86 1.91 2.06 2.20 1.44

0

10

20

30

40

50

60

70

80

90

100

110

16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55

(trillion yen）

(FY)

Treasury Bills2-yr bondsJGBs for retail investors (3-yr-Fixed-rate)JGBs for retail investors (5-yr-Fixed-rate)5-yr bondsInflation-Indexed bondsJGBs for retail investors (Floating-rate)10-yr bonds15-yr-floating-rate bonds20-yr bonds30-yr bonds40-yr bonds

Average remaining years to maturity： 8 years and 6 months

0.2%

0.1%-1

0

1

2

3

4

Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16

(%)

CPI

CPI excluding food (excludingalcohilic beverages) and energy

Change from the previous year

Apr.4, 2013BOJ released QQE

70

80

90

100

110

120

130

140

150

160

Jan-

09Ap

r-09

Jul-0

9O

ct-0

9Ja

n-10

Apr-

10Ju

l-10

Oct

-10

Jan-

11Ap

r-11

Jul-1

1O

ct-1

1Ja

n-12

Apr-

12Ju

l-12

Oct

-12

Jan-

13Ap

r-13

Jul-1

3O

ct-1

3Ja

n-14

Apr-

14Ju

l-14

Oct

-14

Jan-

15Ap

r-15

Jul-1

5O

ct-1

5Ja

n-16

Apr-

16Ju

l-16

Oct

-16

(2010 average=100・Seasonally Adjusted Index)

Production Shipments

Inventory Inventory Ratio

500

600

700

800

900

1,000

1,100

Jan-

09

Apr-

09

Jul-0

9

Oct

-09

Jan-

10

Apr-

10

Jul-1

0

Oct

-10

Jan-

11

Apr-

11

Jul-1

1

Oct

-11

Jan-

12

Apr-

12

Jul-1

2

Oct

-12

Jan-

13

Apr-

13

Jul-1

3

Oct

-13

Jan-

14

Apr-

14

Jul-1

4

Oct

-14

Jan-

15

Apr-

15

Jul-1

5

Oct

-15

Jan-

16

Apr-

16

Jul-1

6

(billion yen)

Monthly Quarter (Mean)

0

50

100

150

200

250

300

350

400

450(trillion yen)

Banknotes in Circulation

Coins in Circulation

Current Account Balances

0.4

0.6

0.8

1

1.2

1.4

1.6

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16

（ratio）

Oct, 20161.40times

Oct, 20163.0％

Aug, 20090.42times

Jul, 20095.5％

Job opening-to-application ratio(right scale)

Unemployment rate(left scale)

2.3

3.2

4.3 3.8

5.4 4.4

5.5

4.1 4.3

1.8 3.3

0.9

2.1

1.1 1.6

-0.0

1.6 2.1

1.7

-1.0 -0.5

0.9

2.0 1.5

4.4 3.7

4.9

3.4

6.0

4.6

5.8

-8

-6

-4

-2

0

2

4

6

8

2009

Q1

2009

Q2

2009

Q3

2009

Q4

2010

Q1

2010

Q2

2010

Q3

2010

Q4

2011

Q1

2011

Q2

2011

Q3

2011

Q4

2012

Q1

2012

Q2

2012

Q3

2012

Q4

2013

Q1

2013

Q2

2013

Q3

2013

Q4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

Primary Income Trade BalanceServices Secondary IncomeCurrent Account

3.7

-1.5 -2.0

-0.1

4.12.8 1.8

-0.2

5.2

-7.8

-2.8

2.3

5.0

-1.3

1.6

-1.6

2.1

0.7

2.2

-14.0

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ

2012 2013 2014 2015 2016

(％)

Private Demand Public Demand

Foreign Demand Real GDP

Annualized rate of Change from the previous quarter (Seasonally adjusted)

(CY)

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Jan-

09

May

-09

Sep

-09

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Jan-

16

May

-16

Sep

-16

(Diffusion index)

Large enterprises/Manufacturing

Large enterprises/Non-Manufacturing

Small enterprises/Manufacturing

Small enterprises/Non-Manufacturing

Real GDP Growth Rate

Employment Conditions

Prices

Changes in Current Account

Monetary Base Indices of Industrial Production

Total Value of Machinery Orders (Private Sector exc. Volatile orders)

TANKAN (Business Conditions)

Source: Cabinet Office "Quarterly Estimates of GDP"

Source: Ministry of Internal Affairs and Communications “CPI”

Source: Ministry of Health, Labour and Welfare “Employment Referrals for General Workers “, Ministry of Internal Affairs and Communications “Labour Force Survey”

Source: Ministry of Finance “Balance of Payments"

Source: Ministry of Economy, Trade and Industry "Indices of Industrial Production”

Source: Cabinet Office, Government Japan "Orders Received for Machinery"

(trillion yen)

6 ECONOMIC AND FINANCIAL TRENDS

Source: Bank of Japan "Monetary Base"

Source: Bank of Japan "Tankan"

－12－

English Publications on JGBs Frequency URL Debt Management

Message from the Financial Bureau As needed http://www.mof.go.jp/english/jgbs/debt_management/message.htm

About JGBs As needed http://www.mof.go.jp/english/jgbs/debt_management/guide.htm

About the Debt Management Policy As needed http://www.mof.go.jp/english/jgbs/debt_management/about.htm

JGB Issuance Plan As needed http://www.mof.go.jp/english/jgbs/debt_management/plan/index.htm

Auction Calendar

Auction Calendar Monthly http://www.mof.go.jp/english/jgbs/auction/calendar/index.htm

Historical Data of Auction Results Each Auction http://www.mof.go.jp/english/jgbs/auction/past_auction_results/index.html

Topics

Product Characteristics of the JGB As needed http://www.mof.go.jp/english/jgbs/topics/bond/index.html

Treasury Discount Bills (T-Bills) Annual http://www.mof.go.jp/english/jgbs/topics/t_bill/index.htm

Japanese Government Guaranteed Bonds Annual http://www.mof.go.jp/english/jgbs/topics/gov_guaranteed_bonds/index.htm

Interest Rate Swap Semiannual http://www.mof.go.jp/english/jgbs/topics/swap/index.htm

Taxation of Government Bonds As needed http://www.mof.go.jp/english/jgbs/topics/taxation/index.htm

For Individual Investors As needed http://www.mof.go.jp/english/jgbs/topics/individual/index.htm

Data

Central Government Debt Quarterly http://www.mof.go.jp/english/jgbs/reference/gbb/index.htm

Interest Rate Daily http://www.mof.go.jp/english/jgbs/reference/interest_rate/index.htm

STRIPS Monthly http://www.mof.go.jp/english/jgbs/reference/jgbstat/index.htm

Dialogue with the market

Advisory Councils on Government Debt Management Each Meeting http://www.mof.go.jp/english/about_mof/councils/gov_debt_management/index.html

Meeting of JGB Market Special Participants Each Meeting http://www.mof.go.jp/english/about_mof/councils/jgbsp/index.html

Meeting of JGB Investors Each Meeting http://www.mof.go.jp/english/about_mof/councils/jgb_investor/index.html

Publications

Debt Management Report Annual http://www.mof.go.jp/english/jgbs/publication/debt_management_report/index.htm

JGB Newsletter Monthly http://www.mof.go.jp/english/jgbs/publication/newsletter/index.htm

Debt Management Policy Division, Financial Bureau, Ministry of Finance 3-1-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8940 Japan

Phone: 81-3-3581-4111 Web: www.mof.go.jp

7 INFORMATION

To subscribe to our Newsletter mailing list, please email: JGB-IR@mof.go.jp

－13－