What’s New: Advisory Council on Government Debt Management P2-5 MOF explained the basic concept on “JGB issuance based on medium- to long-term

market demands,” followed by an analysis of the JGB supply and demand trend basedon the concept. Efforts for “increasing the liquidity of the JGB market” were alsopresented.

Most members agreed on the concept. Various perspectives on JGB investment trendswere discussed.

MOF starts discussions for the FY2018 JGB annual issuance plan, taking theseopinions mentioned in the meeting into account.

Q&A: T+1 JGB settlement in details P6-7 We receive various kinds of questions from JGB investors. We start a Q&A section from

this newsletter and are happy to answer your questions here. This time, Kokusai Senseiwould like to explain the T+1 JGB settlement cycle.

Monthly Topic: BOJ Tankan, September 2017 survey P8 The Business Condition Index of Large Manufacturers sentiment hits the highest level

in a decade since Lehman shock.

IR Office: To the East Asia and US P9 Our IR activities in October: East Asia and US overseas IR tour

(Statistics)JGB Primary Market … P10 The Auction for Enhanced Liquidity and JGB Buy-Back … P11

JGB Secondary Market … P12 Investor Trends and JGB Outstanding … P14

Economic and Financial Trend … P18 Information … P19

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

SUMMARY

The Ministry of Finance www.mof.go.jp

Our fundamental goal of debt management policy is to achieve stable and smooth financing for our national accounts and to minimize medium-to-long term financing costs.

November 2017

－1－

New look for JGB Monthly Newsletter The MOF JGB IR team in November starts to publish the JGB Monthly Newsletter in a renewed format. Since the launch of the new IR team in July after reshuffling, we have considered the update of the format to make it easier to navigate and more interactive. The changes include: Summary by which readers can grasp the contents in a minute Q&A which answers frequently asked questions in our IR activitiesWe hope this new look helps you. Any question, feel free to ask us at: JGB-IR@mof.go.jp

The 45th meeting of the Advisory Council on Government Debt Management The 45th meeting of the Advisory Council on Government Debt Management was held on October 18, 2017. The agenda was as follows: (Agenda)

1. Current Debt Management Policy 2. Shortening JGB Settlement Cycles (report)

The MOF starts discussions for the FY2018 JGB annual issuance plan, considering the opinions mentioned in the meeting.

1. Current Debt Management Policy

[Summary of the MOF explanation on current debt management policy]

① JGB issuance based on medium- to long-term (mid-long) market demands

The basic objectives of the debt management policy have been: - “Implement secure and smooth issuance of JGBs” and - “Minimize medium to long term financing costs.”

In order to achieve them, the MOF aims to promote dialogue with the market and issues JGBs based on market demand. Although market demand-based issuance is intended, excessive response to temporary demands may raise funding costs by harming predictability for market participants or causing distortions of the market. Therefore, it is important to aim at “more stable and predictable issuance of JGBs” considering mid-long-term market demand. In this regard, the MOF analyzed expected supply and demand trends of JGBs in the mid-long term as follows.

Supply side Under the low interest rate environment, to reduce the future interest rate risks, the annual issuance amount of super-long-term bonds has increased in recent years, while that of short- and medium-term bonds has decreased. As a result, the outstanding amount of super-long-term bonds has increased significantly and that of medium- and long-term bonds has increased slightly.

Demand side The MOF analyzed investment trends in JGBs by banks, the main investors for short- and medium-term bonds, and life insurance companies, the main investors for super-long-term bonds. In recent years, life insurance companies increased their super-long-term bond holdings, while banks decreased JGB holdings. As a result, the demand for super-long-term bonds has been on the same trend as the supply side, which has significantly increased in the outstanding amount. However, this structure may change hereafter.

－2－

What’s new

If the current JGB maturity composition was kept unchanged, a considerable amount of super-long-term issuance would be supplied to the market over time, despite netting out of the redemption. On the other hand, the redemption amount of medium- and long-term bonds tends to exceed the issuance amount. To aim at “more stable and predictable issuance of JGBs,” it is important to determine the change in market demand in the mid-long term and set the JGB maturity composition consistent with the change.

－3－

Historical Changes in Outstanding Amount of JGB by maturities

Changes in Outstanding Amount (Net issuance amount of each maturity)

Outstanding Amount of JGB

(FY end)

(trillion yen)

Note1. Up to FY2016: Actual figures, FY2017: Estimate based on initial budget (including 56 trillion yen of front-loading bond)Note2. Outstanding amount by maturities is that of 2-40 Year JGBs which have not matured, not categorized by remaining maturitiesNote3. Figures may not sum up to total because of rounding

(trillion yen)

(FY end)

② Increasing liquidity of JGB market

Liquidity of the JGB Market is another important issue. According to the BOJ’s “Bond Market Survey,” the JGB market function continues to be evaluated as low (or not very high). Also, the supply-demand balance of specific JGB issues may become tightened. One of the causes is that the BOJ purchases issues broadly including off-the-run issues by market operations, while the MOF mainly supplies on-the-run issues by auctions. The MOF focuses on conducting “Auctions for Enhanced-liquidity,” to supply off-the-run issues that are short of liquidity structurally or due to rising demand. The annual issuance amount of this auction has increased in recent years, and the scope of eligible issues has expanded. With regard to “Auctions for Enhanced-liquidity,” issuance amounts of each zone are determined in every quarter, in response to the market environment, based on discussions with market participants. It is considered that this flexible measure will become more important to enhance the market liquidity by the MOF.

－4－

Auctions for Enhanced-liquidity〇Some of off-the-run issues are short of liquidity due to some reasons, such as that considerable amount is held by investors until their maturities.

〇Auctions for Enhanced-liquidity are conducted to enhance function of the JGB market by supplying issues short of market liquidity.

〇 In particular, off-the-run issues are classified by remaining maturity in 3 zones (in 1-5years, 5-15.5years, 15.5-39 years) and the auctions are held respectively. Participants of the auction are limited to JGB Market Special Participants (21 companies). In these auctions, the issuing authority starts selling first to the price which has a large difference from the market price in descending order until the cumulative total reaches the planned issuance amount.

(Note) Auctions for Enhanced-liquidity was first introduced in April 2006. From April 2016, a zone for issues maturing in 1-5years was introduced. Details of Auctions for Enhanced-liquidity, such as the allocation of issuance amount for each zone, are determined in every quarter, in response to the market environment and investor demands, based on discussions with market participants.

inve

stors

・・・・

Remaining maturity 10 years

Remaining maturity 9 years (10-year bonds issued a

year ago)

Remaining maturity 7 years (10-year bonds issued

three year ago)

Remaining maturity 8 years (10-year bonds issued two

year ago)

Regular Auctions

【FY2017： 2.3 trillion yen every month】

Issued in response to demand

【The difference between Regular auctions andAuctions for Enhanced-liquidity】

＜ The image of Auctions for Enhanced-liquidity ＞

Auctions for Enhanced-liquidity(remaining maturity 5-15.5 years)

【FY2017： 0.55 trillion yen every month】

Regular Auctions Auctions for Enhanced-liquidity

Auction Participants

244 companies(financial institutions, etc.)

21 companies(JGB Market Special Participants)

Issue single issue any eligible issues for each zone

Auction methods

selling first to the highest price

selling first to the price which has a large differencefrom the market price

[Opinions from the participants]

(Importance of JGB issuance based on mid-long-term market demand trend)

- Most members agreed on the importance of JGB issuance based on mid-long-term market demand trend, as well as the importance of the Auctions for Enhanced-liquidity.

- Some members mentioned that it is important to discuss the debt management policy from a mid-long-term perspective and at the same time, flexibility is also important to continuously ensure stable issuance. For the flexibility, it was mentioned that active use of Auctions for Enhanced-liquidity continues to be favorable.

(Various perspectives of investment trends of JGBs)

- One of the members mentioned that banks have purchased JGBs and life insurance companies and pension funds have demanded long-term JGBs. If the monetary policy shifts toward tapering, deposit increase in the private sector would slow down. If the population is aging, payments of life insurance companies and pension funds would exceed their revenues. It could decrease demand for JGBs.

- Another member agreed to the MOF’s explanation that banks started to retain their holding amount of JGBs for collateral use. The member added that it should be notified that most JGBs which banks pledge for collateral are JGBs whose durations are less than 2 years.

- With regard to the MOF’s explanation that the liability side of life insurance companies may change hereafter, both in qualitative and quantitative ways, under the aging society with declining population, one of the members mentioned that the liability side may not change just as the MOF explained, because the decline in mortality rate may lead to investment demand in different ways.

- Another member mentioned that until recently, there had been some merits to maturity extension of government debt, to control refunding risks for government, and also to fulfill demands of investors seeking higher return. However, the presence of foreign investors and HFT (High Frequency Trading) has increased in recent years, as opposed to domestic demand which is expected to decline hereafter under the declining population. The time to change the debt management policy towards well-balanced issuance will come.

2. Shortening JGB Settlement Cycles (report)

The details are explained in the Q&A.

－5－

Q1. What is the T+1 JGB settlement cycle and when will it start? A1. The purpose of the introduction of the T+1 settlement cycle is to mitigate settlement risk. In

the T+1 JGB settlement cycle, you will have the settlement on the next business day of the contract day. For example, when you purchase JGBs on Wednesday, May 1, 2018, you will receive the JGBs and pay cash on Thursday, May 2, 2018. The T+1 JGB settlement cycle will start on May 1, 2018, instead of T+2 both in primary and secondary markets. Overview of shortening of settlement cycle of JGB

Settlement date

Present After May 2018 (planned)

Secondary Market T+2

(2 business days after contract) T+1

(1 business day after contract)

Primary Market

General rule T+2

(2 business days after auction) T+1

(1 business day after auction)

Interest-bearing bonds (5-30 Years) issued in March, June, September or December

20th day of auction month (following day if 20th day is holiday)

T+1 (1 business day after auction)

*Maturity will become 3 months shorter

2 Year bonds 15th day of next month of auction

(following day if 15th day is holiday) 1st day of next month of auction (following day if 1st day is holiday)

Q2. Why will the maturity become 3 months shorter only for interest-bearing bonds (5-

30 Years) issued in March, June, September or December in the Primary market (blue cell)? A2. Maturities of 5-30 Year JGBs which are issued in March, June, September or December

will be 3 months shorter than now. The rule to fix the maturity date will be changed as below: Change of the rule to fix the maturity date of 5-30 Year JGBs

Issue Month Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Now (PRESENT) 20 December 20 March 20 June 20 September 20 Dec.

From May 2018 (NEW) 20 December 20 March 20 June 20 September

To explain the background of the change, let’s see a hypothetical example comparing with the

PRESENT rule. [Hypothetical example 1: September 2018 auction of 20 Year JGB under PRESENT rule] - Auction Date: 18 September 2018 - Issue Date: 19 September 2018 - 1st coupon payment: 20 September 2018 (under NEW rule, it will be 20 December 2019) - Maturity Date: 20 September 2038 (under NEW rule, it will be 20 June 2038) In this example, there is only a 1-day gap between the issue date and the 1st coupon payment date. Because some investors said that a short gap between the issue date and the 1st coupon payment date demanded large-scale system improvement, etc., we decided to introduce the NEW rule to avoid such a short gap.

Q&A: T+1 JGB settlement cycle We receive various kinds of questions from JGB investors. We start Q&A section from this newsletter and are happy to answer your questions here. This time, I would like to explain T+1 JGB settlement cycle.

Kokusai Sensei

－6－

Q3. Why will the settlement date be the 1st day of the next month of auction only for 2-

Year bonds in the Primary market (red cell)? A3. The issuance date of 2-Year bonds will be exclusively the 1st day of the next month of the

auction date. It WILL NOT be mechanically T+1. Again, to explain the background of this exceptional treatment, let’s see two hypothetical examples. Please note that auctions of 2-Year JGBs are held once a month, usually on Tuesday or Thursday at/around the end of each month. [Hypothetical example 2: February 2019 auction of 2 Year JGB] - Auction Date: 28 February 2019 - T+1: 1 March 2019 [Hypothetical example 3: March 2019 auction of 2 Year JGB] - Auction Date: 28 March 2019 - T+1: 29 March 2019 These examples show us that with mechanical application of the T+1 rule, 2-Year JGBs could not be issued in a month and could be issued once or twice in another month. To ensure ONE issue in a month and settle as early as possible, we will have this exception.

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

－7－

The Bank of Japan’s TANKAN (Sept. 2017 Survey) On October 2, the Bank of Japan (BOJ) released the TANKAN, a quarterly survey of more than

10,000 companies. The points are as follows:

MONTHLY TOPIC

－8－

The Business Condition Index for Large Manufacturing Enterprises came in at 22, showing its highest level in a decade which is equal to before Lehman shock.

The Index shows four consecutive quarters of improving in Business Conditions.

(Diffusion index of "Favorable" minus "Unfavorable", % points)

(Source) Bank of Japan “Tankan” For more information, see http://www.boj.or.jp/en/statistics/tk/index.htm/

(Source) Bank of Japan “Tankan”

22 (Sep 2017)

[Large Enterprises]

Manufacturing 17 22 +5

June. 2017 Sept. 2017

ChangebetweenJune and

Sept.

Dec. 2017(Forecast)

ChangebetweenSept. and

Dec.

Nonmanufacturing

0 19 -4

[Medium-sized Enterprises]

Manufacturing

19 -3

Nonmanufacturing 23 23

18 19 +1 14 -5

12 17 +5 13 -4

8 -2

Nonmanufacturing 7 8

[Small Enterprises]

Manufacturing 7 10 +3

+1 4 +4

[All Enterprises]

All industries 12 15 +3 11 -4

During the second week of October, Mr. Furuya, deputy director-general of the Financial Bureau, and Mr. Nakatsui, deputy-director for debt management, made a trip to East Asia, Hong Kong, Beijing and Seoul to update the Japanese economy and debt management policy and have discussions with JGB investors. In the discussions, the main topics were the outlook of the general election in Japan, the consumption tax hike, inflation and JGB issuance plans. Supported by the investors’ good knowledge of JGBs, the discussions were much more fruitful than expected. In addition, because it was perfect weather and the IR-team walked a lot on the trip, it was much healthier than expected.

During the first week of October, Ms. Kimata, director for debt

management and JGB investor relations, and Mr. Oshima, researcher, visited Boston and NY to have meetings with various JGB investors including asset management companies and banks. The first city was Boston where the first open-ended investment fund was born. We could see different types of asset managers (passive, active, etc.) but our discussions were always active. After 5 meetings in Boston, we flew to NY, a financial center of the world. In NY, we had 8 meetings with various investors. The topics of the discussions spanned a wide range, including the Japanese economy, politics and the JGB market. Supported by a warm welcome and great weather on the trip, we fortunately completed our schedule perfectly. We appreciate everyone and look forward to seeing them again.

-9-

IR 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

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)

8/1/2017 10-year 347 6/20/2027 0.1% 7,826.3 1,858.1 0.074% 0.073% 0.386 440.4 - 8/3/2017 10-year Inflation-Indexed Bonds 22 3/10/2027 0.1% 1,274.8 399.4 ▲0.358% - - - 19.9 8/8/2017 30-year 55 6/20/2047 0.8% 2,524.5 647.2 0.880% 0.876% - 151.9 30.7 8/17/2017 5-year 132 6/20/2022 0.1% 8,056.3 1,807.4 ▲0.081% ▲0.083% - 391.8 91.2 8/22/2017 20-year 161 6/20/2037 0.6% 3,665.2 813.3 0.552% 0.550% - 186.5 64.3 8/31/2017 2-year 380 9/15/2019 0.1% 8,843.0 1,781.0 ▲0.146% ▲0.149% 0.004 418.1 254.1 9/5/2017 10-year 348 9/20/2027 0.1% 7,369.5 1,865.1 0.016% 0.011% 0.306 434.3 11.1 9/7/2017 30-year 56 9/20/2047 0.8% 2,416.5 658.3 0.841% 0.832% - 141.2 3.6 9/12/2017 5-year 133 9/20/2022 0.1% 7,234.2 1,777.7 ▲0.104% ▲0.110% - 421.6 - 9/14/2017 20-year 162 9/20/2037 0.6% 3,337.7 803.9 0.563% 0.560% - 195.0 77.0 9/26/2017 40-year 10 3/20/2057 0.9% 1,618.0 499.4 1.015% - - - 56.8 9/28/2017 2-year 381 10/15/2019 0.1% 7,416.1 1,804.9 ▲0.114% ▲0.119% - 394.6 - 10/3/2017 10-year 348 9/20/2027 0.1% 7,842.2 1,920.0 0.082% 0.077% 0.496 379.0 - 10/5/2017 10-year Inflation-Indexed Bonds 22 3/10/2027 0.1% 1,237.8 399.4 ▲0.361% - - - 47.0 10/11/2017 30-year 56 9/20/2047 0.8% 2,559.9 643.3 0.884% 0.881% - 155.9 68.8 10/17/2017 20-year 162 9/20/2037 0.6% 3,243.7 800.1 0.591% 0.590% - 198.9 85.2 10/19/2017 5-year 133 9/20/2022 0.1% 7,559.9 1,782.9 ▲0.082% ▲0.082% - 416.1 328.1 10/26/2017 2-year 382 11/15/2019 0.1% 10,599.0 1,786.6 ▲0.141% ▲0.143% 0.500 412.3 163.9

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)

8/3/2017 3-month 699 11/6/2017 14,635.50 3,638.63 ▲0.1142% ▲0.1178% 801.30 8/8/2017 6-month 700 2/13/2018 9,936.20 2,133.95 ▲0.1131% ▲0.1150% 466.00 8/9/2017 3-month 701 11/13/2017 17,864.70 3,525.17 ▲0.1082% ▲0.1110% 824.80 8/16/2017 1-year 702 8/20/2018 9,223.60 1,861.09 ▲0.1251% ▲0.1281% 438.86 8/17/2017 3-month 703 11/20/2017 18,512.20 3,550.13 ▲0.1243% ▲0.1275% 829.80 8/24/2017 3-month 704 11/27/2017 18,348.70 3,588.05 ▲0.1423% ▲0.1463% 821.90 8/31/2017 3-month 705 12/4/2017 15,682.70 3,584.17 ▲0.1683% ▲0.1760% 805.80 9/6/2017 6-month 706 3/12/2018 7,189.60 2,116.16 ▲0.1823% ▲0.1983% 483.80 9/7/2017 3-month 707 12/11/2017 11,539.40 3,621.75 ▲0.1864% ▲0.2040% 798.20 9/14/2017 3-month 708 12/18/2017 14,652.70 3,654.48 ▲0.1175% ▲0.1394% 745.50 9/15/2017 1-year 709 9/20/2018 9,178.60 1,876.68 ▲0.1278% ▲0.1308% 423.30 9/20/2017 3-month 710 12/25/2017 16,561.00 3,702.04 ▲0.1002% ▲0.1074% 727.90 9/28/2017 3-month 711 1/10/2018 15,884.90 3,563.08 ▲0.1550% ▲0.1652% 816.90 10/4/2017 6-month 712 4/10/2018 9,147.40 1,866.85 ▲0.1603% ▲0.1643% 433.10 10/5/2017 3-month 713 1/15/2018 14,000.50 3,569.58 ▲0.1617% ▲0.1685% 830.40 10/12/2017 3-month 714 1/22/2018 12,893.70 3,590.07 ▲0.1768% ▲0.1865% 849.90 10/18/2017 1-year 715 10/22/2018 9,965.40 1,896.79 ▲0.1618% ▲0.1687% 403.20 10/19/2017 3-month 716 1/29/2018 14,963.80 3,542.77 ▲0.1861% ▲0.1924% 827.20 10/26/2017 3-month 717 2/5/2018 14,573.50 3,600.63 ▲0.1898% ▲0.1961% 839.30

Auction Calendar for Nov. 2017 – Jan. 2018 Auction Date Issue Auction Date Issue Auction Date Issue Auction Date Issue 11/1(Wed) T-Bills (3-month) 11/28(Tue) 40-year 12/20(Wed) T-Bills (3-month) 1/18(Thu) 30-year

11/1(Wed) 10-year 11/30(Thu) T-Bills (3-month) 12/22(Fri) Auctions for Enhanced-liquidity (remaining maturities of 5-15.5 years) 1/22(Mon) Auctions for Enhanced-liquidity

(remaining maturities of 5-15.5 years)

11/7(Tue) Auctions for Enhanced-liquidity (remaining maturities of 1-5 years) 11/30(Thu) 2-year 12/26(Tue) 2-year 1/25(Thu) T-Bills (3-month)

11/8(Wed) T-Bills (6-month) 12/5(Tue) 10-year 1/5(Fri) T-Bills (3-month) 1/25(Thu) 20-year

11/9(Thu) T-Bills (3-month) 12/6(Wed) T-Bills (6-month) 1/5(Fri) Auctions for Enhanced-liquidity (remaining maturities of 1-5 years) 1/30(Tue) 2-year

11/9(Thu) 30-year 12/7(Thu) T-Bills (3-month) 1/10(Wed) T-Bills (6-month) 11/14(Tue) 5-year 12/7(Thu) 30-year 1/10(Wed) 10-year 11/15(Wed) T-Bills (1-year) 12/12(Tue) 5-year 1/11(Thu) T-Bills (3-month) 11/16(Thu) T-Bills (3-month) 12/14(Thu) T-Bills (3-month) 1/12(Fri) 40-year 11/16(Thu) 20-year 12/14(Thu) 20-year 1/16(Tue) 5-year 11/21(Tue) Auctions for Enhanced-liquidity

(remaining maturities of 5-15.5 years) 12/18(Mon) T-Bills (1-year) 1/17(Wed) T-Bills (1-year)

11/22(Wed) T-Bills (3-month) 12/19(Tue) Auctions for Enhanced-liquidity (remaining maturities of 15.5-39 years) 1/18(Thu) T-Bills (3-month)

Top 10 PDs by Total Purchase in Auctions (Calculated by Duration) (Apr. 2017 ～ Sep. 2017) 1 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. 6 Deutsche Securities lnc. 2 Nomura Securities Co., Ltd. 7 SMBC Nikko Securities Inc. 3 Daiwa Securities Co. Ltd. 8 BNP Paribas Securities (Japan) Limited 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.

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.

(Until 31 October 2017)

(Until 31 October 2017)

-10-

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

8/24/2017 2,040.7 549.0 ▲0.012% ▲0.011% 10-year(329, 330, 332) 20-year(67, 142) 30-year(9)

8/29/2017 967.5 398.2 ▲0.007% ▲0.003% 20-year(143, 146) 30-year(13, 18, 22, 50, 51, 52) 40-year(5, 7, 8, 9)

9/20/2017 1,212.9 299.2 ▲0.007% ▲0.005%

2-year(370, 372, 373) 5-year(125, 131) 10-year(319, 320) 20-year(41, 47, 48, 53, 56, 57)

9/22/2017 1,544.7 547.6 ▲0.014% ▲0.013% 10-year(325, 327, 328, 329, 330, 333, 334, 335) 20-year(58, 61, 64, 65, 83, 84, 126, 127, 130, 131, 133, 134, 135, 138, 139, 140) 30-year(2, 7, 8, 9)

10/13/2017 1,990.9 546.6 +0.001% +0.002%

10-year(327, 328, 329, 330, 331, 332, 333, 334) 20-year(61, 64, 70, 71, 72, 76, 77, 94, 97, 99, 100, 101, 107, 109, 111, 114, 115, 127, 128, 130, 131, 137, 142) 30-year(2, 3)

10/24/2017 1,252.7 397.4 ▲0.007% ▲0.006% 20-year(145) 30-year(13, 15, 17, 25, 29, 33, 34, 38, 39, 41, 45, 46, 47, 49, 50, 51) 40-year(1, 3, 5, 6, 9)

Target Zones of the Auction for Enhanced-Liquidity for the Third Quarter of FY 2017

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

4/17/2017 132.1 20.3 ▲0.149 ▲0.11 19, 20, 21, 22 6/15/2017 121.0 20.1 ▲0.284 ▲0.27 20, 22 8/18/2017 126.7 20.0 ▲0.111 ▲0.08 22

10/20/2017 90.2 20.0 ▲0.182 ▲0.09 18, 19, 20, 22

THE AUCTIONS FOR ENHANCED-LIQUIDITY AND JGB BUY-BACK

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

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

Note1： 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 2017. Note2： All issues in the graph above will be eligible afterward.

Buy-back Results

(Until 31 October 2017)

(Until 2 November 2017)

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

-11-

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0006,5007,000

JN37

0

JN37

1

JS11

6

297

298

JN37

2

JN37

3

JN37

4

JS11

7

299

300

JL41

JL42

JN37

5

JN37

6

JN37

7

JS11

8

JS11

9

301

302

JN37

8

JN37

9

JN38

0

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

JS12

9

317

318

JL52

JS13

0

319

320

JL53

JL54

JS13

1

321

322

JL55

JS13

2

323

324

JL56

JL57 325

JL58

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

1,0001,5002,0002,5003,0003,5004,0004,5005,000

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 34

4JL

90JL

91 345

JL92 34

6JL

93JL

94 347

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

6JX

7JL

137

JL13

8JL

139

JL14

0JX

8JL

141

JL14

2JX

9JL

143

JL14

4JX

10

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

JL14

5

JX11

JL14

6

JX12

JL14

7

JX13

JL14

8

JX14

JL14

9

JX15

JL15

0

JX16

JL15

1

JX17

JL15

2

JX18

JL15

3

JX19

JL15

4

JX20

JL15

5

JX21

JL15

6

JX22

JL15

7

JX23

JL15

8

JX24

JL15

9

JX25

JL16

0

JX26

JL16

1

JX27

JX28

JX29

JX30

JX31

JX32

JX33

JX34

JX35

JX36

JX37

JX38

JX39

JX40

JX41

JX42

JX43

JX44

JX45

JX46

JX47

JX48

JX49

JX50

JX51

JX52

JX53

JX54

JX55 JU1

JU2

JU3

JU4

JU5

JU6

JU7

JU8

JU9

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

-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 Jan-17

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

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

-1%

0%

1%

2%

3%

4%

5%

Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

Japan United States

United Kingdom Germany

-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-13May-13Sep-13 Jan-14May-14Sep-14 Jan-15May-15Sep-15 Jan-16May-16Sep-16 Jan-17May-17Sep-17

Volatility Yield (right scale)

-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

2016/12/302017/3/312017/6/302017/7/312017/8/312017/9/29

40353020 25151050

-1%

0%

1%

2%

3%

4%

5%

Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

BEI (Japan : 10 year)

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

BEI (U.K. : 10 year)

Note: 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.

JGB SECONDARY MARKET JGB Yield Curves

Source: Japan Bond Trading Co.,Ltd.

Yields of JGB

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

Source: Bloomberg

-12-

Yield and Volatility (10Yr)

Break-Even Inflation Rates

Source: Bloomberg, Calculation by the Ministry of Finance

(Until 29 September 2017)

(Until 29 September 2017)

(Until 29 September 2017)

(Until 29 September 2017)

0

500

1,000

1,500

2,000

2,500

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

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 Jan-17

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 Jan-17

Treasury Discount BillsMedium Term BondsLong Term Bonds

-0.1%

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

Call Rate (Uncollateralized Overnight)

TIBOR 3-months (Euro-Yen)

Basic Loan Rate

Short-Term Interest Rates

Source: Bank of Japan, Japanese Bankers Association

JGB Over-the-Counter Trading Volume (TOKYO)

Trading Volume of 10-Year JGB Futures

Repurchase Transactions

-13-

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 29 September 2017)

0

50

100

150

200

250

300

350

400

450

500

550

Apr-12 Oct-12 Apr-13 Oct-13 Apr-14 Oct-14 Apr-15 Oct-15 Apr-16 Oct-16 Apr-17

Total AssetsMonetary BaseJGBs

QQE2QQE（trillion yen）Apr 2013(Actual)

Sep 2017(Actual)

Monetary Base 155 475

JGBs 98 404

CP 1.4 1.9

Corporate Bonds 2.9 3.2

ETFs 1.7 15.8

J-REITs 0.13 0.43

Total Assets 175 513

0

10

20

30

40

50

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

190200210220230240250

0

20

40

60

80

100

120

140

Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

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

7.0

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

City Banks

Net Purchase

Net Sale

2013 2014 2015 2016 2017

-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 Jan Apr Jul

Regional banks

Net Purchase

Net Sale

2013 2014 2015 2016 2017

-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 Jan Apr Jul

Life and non-life insurance companies

Net Purchase

Net Sale

2013 2014 2015 2016 2017

-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 Jan Apr Jul

Foreigners

Net Purchase

Net Sale

2013 2014 2015 2016 2017

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

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

-14-

Trends in Bank Assets by Types

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 Jan-17

City Banks Trust Banks Insurance Companies Foreigners

-6

-5

-4

-3

-2

-1

0

1

2

3

4

Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

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 Jan-17

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 Jan-17

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

Net

Purchase

Net

Sales

59.1 63.3

67.9

55.2 55.6

55.0 52.2 49.3

46.4

52.1

58.1 56.6

61.8 67.8

77.0 78.3

76.7 81.8

86.1

82.6 81.9

81.7 79.0

83.8 81.5

83.9 87.2

93.0

97.7

94.9 100.5

108.5 110.3

111.6 113.6

114.9

116.6 117.0

7.3

7.9

8.5

6.8

6.9 6.7 6.3

5.9 5.5

6.0

6.6 6.4

7.0 7.5

8.3 8.5 8.3 8.6

9.0 8.5 8.4 8.4

8.0 8.4

8.1 8.2 8.6

9.1 9.4

9.1 9.6

10.4 10.2 10.1 10.4

10.6 10.8 10.8

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 Mar-17

Amount of JGB Holdings (right)

Proportion of JGB Holdings (left)

(trillion yen)

%

%

%

%

%

%

%

%

%

%

%

10.8%

32.2%

52.1%

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 Mar-17

①Market Share of Foreign Investors (JGB Futures Market)

②Market Share of Foreign Investors (JGB Market)

③JGB Holdings by Foreign Investors

-15-

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

0

50

100

150

200

250

300

350

400

450

500

550

600

650

700

750

800

850

FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016

18.6% 17.0% 17.8% 18.3% 18.2% 17.9% 17.3% 16.4% 15.1% 14.3%

11.5% 11.4%13.0% 12.5% 11.9% 12.4% 12.0% 11.1% 10.6% 10.5%

8.2% 8.9%8.5%

7.9% 8.6% 8.1% 7.8% 7.8% 7.9% 7.7%9.0% 9.2%

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

8.6% 8.4%

8.8%8.4% 7.8%

7.8% 7.8% 7.4% 7.8% 6.8%

4.6% 5.3%

5.2%4.7%

4.9%4.4% 4.2% 5.0% 4.2% 4.4%

5.6% 5.6%

4.9%5.2% 4.6%

4.5%5.0% 4.3% 4.4% 4.8%

6.0% 5.5%

5.5%4.8%

4.8%5.3%

4.5% 4.5% 5.0% 4.8%

5.9% 6.2%

5.2%5.1%

5.6%4.7%

4.8% 5.2% 4.9% 5.1%

5.5% 5.0%

4.7%5.2%

4.4%4.3%

4.6% 4.2% 4.5% 4.1%

14.5% 14.8%

14.4%

14.4%14.9%

15.6%16.5%

17.7%18.4% 19.2%

2.0% 2.7%

3.6%

4.6%

5.8%

6.7%

7.5%8.3%

9.4%10.1% 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）

541.5 545.9

594.0

636.3669.9

705.0

743.9

774.1805.4

*years to maturity

Average

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

Average YTM*

(excluding saving

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

830.6

General Government

(ex Public Pensions)

3.6 0.4% Fiscal

Loan Fund0.0

0.0%

BOJ401.9 41.3%

Banks,etc.205.7 21.1%

Life and Non-life Insurance,etc.

202.5 20.8%

Public Pensions

46.9 4.8%

Pension Funds30.8 3.2%

Foreigners57.4 5.9%

Households12.3 1.3%

Others12.0 1.2%

General Government(ex Public Pensions)

3.6 0.3% Fiscal

Loan Fund0.0

0.0%

BOJ436.9 40.3%

Banks,etc.220.8 20.4%

Life and Non-life Insurance,etc.

204.7 18.9%

Public Pensions

46.9 4.3%

Pension Funds30.8 2.8%

Foreigners117.0 10.8%

Households12.3 1.1%

Others12.0 1.1%

JGB and T-Bill Holders

Breakdown by JGB and T-Bill Holders (The end of Jun. 2017 QE)

Source: Bank of Japan “Flow of Funds Accounts (Preliminary Figures)” Note1: “JGB” includes FILP Bonds. Note2: “Banks, etc.” includes Japan Post Bank, “Securities investment trust” and “Securities companies.” Note3: “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 112.0 trillion yen

JGB Holders

Total 972.9 trillion yen

Total 1,084.9 trillion yen

-16-

General Government(ex Public Pensions)

0.0 0.0%

Fiscal Loan Fund

0.0 0.0%

BOJ35.0

31.2%

Banks,etc.15.2

13.5%

Life and Non-life Insurance,etc.

2.2 2.0%

Public Pensions

0.0 0.0%

Pension Funds

0.0 0.0%

Foreigners59.7

53.3%

Households0.0

0.0%

Others0.0

0.0%

Types The amount of redemption at maturity Scheduled redemption date

15-Year Floating-Rate Bonds 625.7 November 20

2-Year Bonds 2,583.4 November 15

Treasury Bill 2,100.0 November 20

Total 5,309.1

0100200300400500600700800900

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

14 15 16 17 18 19 20 21 22

(billion yen)

(issue number)

Outstanding amount(excl. BOJ holding)

BOJ holding

Old type(without floor)

Market BOJ TotalOld 476 470 946New 6,074 1,045 7,119

Source: Ministry of Finance

Time-to-Maturity Structure of Outstanding JGB（Jun. 2017）

General Bonds Issuance Amount and Outstanding

Note 1: Issuance Amount: revenue basis, FY2005-2015: actual, FY2016: estimates, FY2017: initial budget Note 2: Outstanding: nominal basis, FY2005-2015: actual, FY2016: estimates, FY2017: initial budget Source: Ministry of Finance

Market-held Balance of the Inflation-Indexed Bonds (as of September 30, 2017)

(trillion yen)

Scheduled redemption of JGB at maturity in November, 2017

Note.1: The figures are based on the outstanding JGBs at the end of September, 2017. 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: The figures do not include "JGB for Retail Investors". Note.4: If the redemption date coincides with bank holiday, the payment of redemption is carried out on the following business day. Note.5: Figures may not sum up to total because of rounding.

(billion yen)

-17-

Source: Ministry of Finance, Bank of Japan

526.9 531.7 541.5 545.9 594.0 636.3 669.9 705.0 743.9 774.1 805.4 845.3 865.2

136.8 135.6 124.6 127.1

142.4 143.1 163.1 163.3

153.6 158.0 150.5 150.2 142.0

100

200

300

400

500

600

700

800

900

0

30

60

90

120

150

180

05 06 07 08 09 10 11 12 13 14 15 16 17

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

88.58

94.28

70.4368.67

60.59

39.68 40.3039.44

42.4539.63

13.51 12.1714.31 16.01

15.67

18.20 18.0419.85

19.15 17.94

4.91 4.73 5.32 6.39 6.91 6.19 8.16 9.44 10.74 8.83

1.64 1.30 1.31 1.93 1.87 1.96 2.06 2.22 2.21 0.220

102030405060708090

100110120130

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 56

(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 8 months

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

Oct

-16

Jan-

17

Apr-

17

Jul-1

7

(billion yen)

Monthly Quarter (Mean)

-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

Jan-

17

May

-17

Sep-

17

(Diffusion index)

Large enterprises/Manufacturing

Large enterprises/Non-Manufacturing

Small enterprises/Manufacturing

Small enterprises/Non-Manufacturing

70

80

90

100

110

120

130

140

150

160

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

Jan-

17

May

-17

Sep-

17

(2010 average=100・Seasonally Adjusted Index)

Production Shipments

Inventory Inventory Ratio

0

50

100

150

200

250

300

350

400

450

500(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 Jan-17

（ratio）Sep, 20171.52times

Sep, 20172.8％

Aug, 20090.42times

Jul, 20095.5％

Job opening-to-application ratio(right scale)

Unemployment rate(left scale)

0.7%

0.0%

-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 Jan-17 Jul-17

(%)

CPI

CPI excluding food (excludingalcohilic beverages) and energy

Change from the previous year

Apr.4, 2013BOJ released QQE

4.4

-1.8 -1.6

0.5

4.93.9 2.7

-0.4

4.4

-7.4

-0.5

3.0

4.6

-0.1

0.7

-0.9

2.1 2.0

0.91.6 1.2

2.5

-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 Ⅳ Ⅰ Ⅱ

2012 2013 2014 2015 2016 2017

(％)

Private Demand Public Demand

Foreign Demand Real GDP

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

(CY)

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 1.6

4.3

3.9

4.9

3.1

5.9

4.6

5.8

4.1

6.0

4.5

-8

-6

-4

-2

0

2

4

6

8

2009

Q120

09Q2

2009

Q320

09Q4

2010

Q120

10Q2

2010

Q320

10Q4

2011

Q120

11Q2

2011

Q320

11Q4

2012

Q120

12Q2

2012

Q320

12Q4

2013

Q120

13Q2

2013

Q320

13Q4

2014

Q120

14Q2

2014

Q320

14Q4

2015

Q120

15Q2

2015

Q320

15Q4

2016

Q120

16Q2

2016

Q320

16Q4

2017

Q120

17Q2

Primary Income Trade BalanceServices Secondary IncomeCurrent Account

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 of Japan "Orders Received for Machinery"

(trillion yen)

ECONOMIC AND FINANCIAL TRENDS

Source: Bank of Japan "Monetary Base"

Source: Bank of Japan "Tankan"

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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/taxation2016/index.html

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

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

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INFORMATION