WHAT’S NEW 【JGB Issuance Plan for FY2011】 Ministry of Finance formulated and announced the JGB Issuance Plan for FY2011 in late December 2010. The details of the issuance plan are as follows. < Issue Amounts > JGB total issuance for FY2011 is planned to be 169.6 trillion yen, and the JGB market issuance (Calendar Base) is planned to be 144.9 trillion yen. Both amounts show an increase from the level of the previous year for three consecutive years. The Ministry of Finance of Japan www.mof.go.jp Quarterly Newsletter of the Ministry of Finance of Japan JAPANESE GOVERNMENT BONDS January 2011 Contents 1 What’s new 2 JGB primary market 3 The Auction for Enhanced-liquidity and Buy-back 4 JGB secondary market 5 JGB outstanding 6 Economic and financial trend ＜Breakdown by Fiscal Needs＞ （Unit: billion yen） FY2010 (Initial) (a) (b) (b) － (a) (c) (c) － (a) (c) － (b) New Financial Resource Bonds 44,303.0 44,303.0 - 44,298.0 ▲ 5.0 ▲ 5.0 6,353.0 7,603.0 1,250.0 6,090.0 ▲ 263.0 ▲ 1,513.0 37,950.0 36,700.0 ▲ 1,250.0 38,208.0 258.0 1,508.0 Refunding Bonds 102,610.9 102,404.8 ▲ 206.0 111,296.3 8,685.4 8,891.4 FILP Bonds 15,500.0 15,500.0 - 14,000.0 ▲ 1,500.0 ▲ 1,500.0 162,413.9 162,207.8 ▲ 206.0 169,594.3 7,180.4 7,386.4 ・ (note) Part of the Buy-back operation in FY2011 is intended to improve ALM in Fiscal Loan Fund Special Account. ・ The maximum amount of front-loaded issuance of Refunding Bonds in FY2011 is 12 trillion yen. (note1) Figures may not sum up to total because of rounding. (note2) (note3) ＜Breakdown by Financing Methods＞ （Unit: billion yen） FY2010 (Initial) (a) (b) (b) － (a) (c) (c) － (a) (c) － (b) 144,300.0 142,800.0 ▲ 1,500.0 144,900.0 600.0 2,100.0 3,982.5 6,177.0 2,194.5 4,005.0 22.5 ▲ 2,172.0 31.4 530.8 499.5 6,389.3 6,357.9 5,858.4 Subtotal Financed in the Market 148,313.9 149,507.8 1,194.0 155,294.3 6,980.4 5,786.4 2,000.0 900.0 ▲ 1,100.0 2,000.0 - 1,100.0 800.0 500.0 ▲ 300.0 500.0 ▲ 300.0 - Subtotal for Households 2,800.0 1,400.0 ▲ 1,400.0 2,500.0 ▲ 300.0 1,100.0 Public Sector （Bank of Japan） 11,300.0 11,300.0 - 11,800.0 500.0 500.0 162,413.9 162,207.8 ▲ 206.0 169,594.3 7,180.4 7,386.4 Special Deficit-financing Bonds The total Buy-back amount from the market is approximately 3 trillion yen in FY2011. From an administrative standpoint, part of the Buy-back operation will be funded by liquidating the GDCF, which is in line with the outcome of the recent public budget screening initiative carried out on special accounts of national budget. Such Buy-back operation based on a partial liquidation of the GDCF is also carried out in FY2010, amounting up to approximately 0.8 trillion yen. Total Total JGB Market Issuance (Calendar Base) refers to JGBs issued by scheduled auctions from April to next March. JGB Market Issuance （Calendar Base） Non-price Competitive Auction Ⅱ Adjustment by Depleting Front- loaded Issuance Nonmarketable JGBs for Retail Investors OTC Sales for Households FY2010 （Supplementary budget） FY2011 （Initial） Construction Bonds Non-price competitive auction Ⅱ is an auction carried out after the price-competitive auction. The price offered is equal to the weighted average accepted price in the price-competitive auction. Only the JGB Market Special Participants are eligible to bid in this auction (the amount assignable to each Market Special Participant will not exceed 15% of the amount awarded to it in the price-competitive auction). Non-price competitive auction Ⅱ is estimated at 3.75% of the JGB Market Issuance （40-year, 30-year, 20-year, 10-year, 5-year, 2-year, 15-year Floating-rate and 10-year Inflation-indexed). FY2010 （Supplementary budget/ revised in December） FY2011 （Initial） ＜Market Issuance Plan by JGB Types＞ (b) － (a) (c) － (a) (c) － (b) ▲ 1.5 0.6 2.1 (note1) (note2) With regerd to TBs(6-month), only the total amount is listed because TBs and FBs are issued as unified bills (Treasury Discount Bills). (note3) (note4) 40-year bonds will be issued in May, August, November and February in FY2011. 30-year bonds will be issued in April, June, July, September, October, December, January and March in FY2011. 12 times 2.512 ―times 31.2 ― 30.0 2.6 12 times 12 times ― ― 2.6 × 0.6 × 2.2 × 2.4 × 2.5 × times12×1.1 times12×2.2 0.7 × 8 times months12× ― ― times Details of Auctions for Enhanced-Liquidity will be determined on a quarterly basis taking market conditions into consideration. 0.4 × 4 ─ ▲ 0.3 0.6 times 142.8 7.20.6 × 12 months ― ― ― ▲ 0.9 ▲ 0.3 ▲ 0.3― (b) 1.2 13.2 28.8 4.8 26.4 4times 8times ― ―times 0.3 × 30-year ×0.6 ― 20-year ×1.1 1.1 × 12 times Auctions for Enhanced-liquidity ×0.6 12 1 10-year Inflation- indexed × months 0.9 7.2 time0.3 1 TBs(6-month) 15-year Floating-rate ×0.3 TBs(1-year) ×2.5 2-year ×2.6 times 5-year ×times2.4 12 10-year ×2.2 FY2010(Initial) (a) 40-year ×times0.3 4 times times time 12 8 0.3 0.3 30.0 31.2 12 28.8 times 12 12 FY2011(Initial) (c) 1.2 4.8 26.4 13.2 5.6 26.4 0.8 0.8 1.6 0.4 0.4 28.8 ―― 13.2 ―― ―― × 31.212 times ――times12 × 0.90.9 ― ▲ 0.3 ― ― ― ―― The issuance of the 10-year Inflation-indexed bonds in FY2011 could be resumed if the market condition allows. In such case, the product designs may be reviewed such as providing principal guarantees at maturity. FY2010 (Supplementary budget/revised in December) 144.9144.3 Total to the Market 7.2 30.012× 2.4 （Unit: trillion yen） < Main Policies in FY2011 > ○Development of Super Long-Term Bond Market ➣In order to enhance the liquidity in super-long term bonds, the total issuance amounts of 30-year and 40-year bonds are increased in response to the greater needs for long-term investments arising mainly from life insurance companies and pension funds. ○Promotion of JGB Holding by Retail Investors ➣Improvement in product designs of JGBs for retail investors. ・ Revisions of the rate-setting formula for 10-year floating-rate intending to prevent an excessive deterioration of the interest rate in a low interest rate environment of the market (reference rate － 0.8% ⇒ reference rate × 0.66). ・ Unification of the conditions for redemption before maturity across the different products of JGBs for retail investors by shortening the lock-up period for the 5-year fixed-rate bonds (2 years ⇒ 1 year). ○Buy-back by Partial Liquidation of Government Debt Consolidation Fund (GDCF) ➣The total Buy-back amount from the market is approximately 3 trillion yen in FY2011. From an administrative standpoint, part of the Buy-back operation will be funded by liquidating the GDCF, which is in line with the outcome of the recent public budget screening initiative carried out on special accounts of national budget. （note1）Such Buy-back operation based on a partial liquidation of the GDCF is also carried out in FY2010, amounting up to approximately 0.8 trillion yen. （note2）Part of the Buy-back operation in FY2011 is intended to improve ALM in Fiscal Loan Fund Special Account. - 2 - 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 ) 10/ 7/2010 10-year 311 9/20/2020 0.8% 5,711.1 2,007.3 0.843% 0.839% 6.502 185.2 0 10/14/2010 30-year 33 9/20/2040 2.0% 2,985.3 552.8 1.981% 1.976% - 46.2 86.4 10/19/2010 5-year 92 9/20/2015 0.3% 7,566.6 2,205.7 0.279% 0.275% 2.284 191.2 10.3 10/21/2010 20-year 122 9/20/2030 1.8% 4,411.8 999.8 1.772% 1.770% - 98.8 128.3 10/27/2010 2-year 298 11/15/2012 0.1% 13,176.5 2,380.2 0.140% 0.139% 3.293 215.3 204.4 11/ 2/2010 10-year 310 9/20/2020 1.0% 7,854.3 2,009.2 0.971% 0.968% 5.239 184.6 323.9 11/ 9/2010 40-year 3 3/20/2050 2.2% 1,243.9 299.6 2.055% - - - 18.4 11/11/2010 5-year 92 9/20/2015 0.3% 8,597.9 2,189.7 0.341% 0.339% 1.407 208.0 0 11/18/2010 20-year 121 9/20/2030 1.9% 2,547.0 1,001.1 1.920% 1.902% - 98.6 0 11/25/2010 2-year 299 12/15/2012 0.2% 7,667.0 2,401.3 0.172% 0.171% 3.579 194.5 0 12/ 1/2010 10-year 312 12/20/2020 1.2% 4,809.8 1,998.1 1.198% 1.189% 10.688 190.5 323.1 12/ 7/2010 30-year 33 9/20/2040 2.0% 1,629.1 551.9 2.200% 2.185% - 47.4 34.7 12/ 9/2010 5-year 93 12/20/2015 0.5% 6,099.9 2,192.7 0.574% 0.565% 5.530 201.3 348.4 12/14/2010 20-year 123 12/20/2030 2.1% 3,526.0 1,002.4 2.082% 2.073% - 96.9 97.9 12/22/2010 2-year 300 1/15/2013 0.2% 8,472.7 2,418.2 0.235% 0.229% 4.129 176.9 368.4 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) 10/ 4/2010 6-month 141 4/12/2011 17,879.90 3,230.45 0.1103% 0.1103% 269.40 10/ 6/2010 3-month 142 1/17/2011 26,287.50 4,424.52 0.1035% 0.1031% 359.40 10/12/2010 Approx,. 2-month 143 12/ 2/2010 25,206.40 2,347.09 0.1064% 0.1057% 152.80 10/13/2010 3-month 144 1/24/2011 29,286.80 4,472.07 0.1061% 0.1054% 349.81 10/15/2010 1-year 145 10/20/2011 11,047.40 2,329.22 0.1121% 0.1111% 170.70 10/20/2010 3-month 146 1/31/2011 27,425.10 4,440.91 0.1080% 0.1072% 349.00 10/27/2010 3-month 147 2/ 7/2011 27,792.70 4,472.51 0.1080% 0.1069% 361.40 11/ 2/2010 3-month 148 2/14/2011 24,804.00 4,480.01 0.1080% 0.1076% 317.91 11/ 4/2010 6-month 149 5/13/2011 14,991.70 3,276.65 0.1131% 0.1111% 223.25 11/10/2010 3-month 150 2/21/2011 21,878.90 4,516.81 0.1117% 0.1113% 312.10 11/15/2010 1-year 151 11/21/2011 7,374.40 2,366.62 0.1255% 0.1224% 133.30 11/17/2010 3-month 152 2/28/2011 21,422.30 4,495.81 0.1173% 0.1166% 324.09 11/19/2010 Approx,. 2-month 153 1/25/2011 12,310.50 2,339.46 0.1167% 0.1161% 160.47 11/24/2010 3-month 154 3/ 7/2011 16,623.20 4,421.99 0.1192% 0.1177% 339.90 12/ 1/2010 3-month 155 3/14/2011 17,875.20 4,423.92 0.1266% 0.1263% 356.00 12/ 7/2010 6-month 156 6/10/2011 12,206.70 3,277.61 0.1284% 0.1284% 222.32 12/ 8/2010 3-month 157 3/22/2011 16,191.20 4,399.48 0.1253% 0.1231% 380.40 12/10/2010 Approx,. 2-month 158 2/ 2/2011 13,017.90 2,322.81 0.1266% 0.1259% 177.13 12/14/2010 1-year 159 12/20/2011 4,295.00 2,369.10 0.1893% 0.1763% 130.90 12/15/2010 3-month 160 3/ 28/2011 10,543.70 4,432.76 0.1415% 0.1404% 347.15 12/20/2010 3-month 161 4/ 7/2011 12,189.00 4,493.58 0.1319% 0.1297% 341.33 Auction Calendar for Jan. – Mar. 2011 Auction Date Issue Auction Date Issue Auction Date Issue Auction Date Issue 1/ 6 (Thu) T-Bills(3-month) 1/24 (Mon) Auction for Enhanced-liquidity 2/16 (wed) 5-year 3/10 (Thu) 5-year 1/ 6 (Thu) 10-year 1/26 (Wed) T-Bills(3-month) 2/18 (Fri) Auction for Enhanced-liquidity 3/14 (Mon) T-Bills(1-year) 1/ 7 (Fri) T-Bills(6-month) 1/27 (Thu) 2-year 2/22 (Tue) 20-year 3/16 (Wed) T-Bills(3-month) 1/11 (Tue) Auction for Enhanced-liquidity 2/ 1 (Tue) 10-year 2/23(wed) T-Bills(3-month) 3/16 (Wed) 20-year 1/12 (Wed) T-Bills(3-month) 2/ 2 (Wed) T-Bills(3-month) 2/24 (Thu) 2-year 3/22 (Tue) T-Bills(Approx.2-month) 1/13 (Thu) 30-year 2/ 3 (Thu) Auction for Enhanced-liquidity 3/ 1 (Tue) 10-year 3/22 (Tue) Auction for Enhanced-liquidity 1/17 (Mon) T-Bills(1-year) 2/ 7 (Mon) T-Bills(6-month) 3/ 2 (Wed) T-Bills(3-month) 3/23 (Wed) T-Bills(3-month) 1/18 (Tue) 5-year 2/ 8 (Tue) T-Bills(3-month) 3/ 3 (Thu) Auction for Enhanced-liquidity 3/24(Thu) 2-year 1/19 (Wed) T-Bills(3-month) 2/ 8 (Tue) 40-year 3/ 7 (Mon) T-Bills(6-month) 1/20 (Thu) T-Bills(Approx.2-month) 2/14(Mon) T-Bills(1-year) 3/ 8 (Tue) 30-year 1/20 (Thu) 20-year 2/16 (wed) T-Bills(3-month) 3/ 9 (Wed) T-Bills(3-month) Total Bidding Amount of JGBs （Calculated by Duration） Top 10 （Jul. 2010 ～ Dec. 2010） 1 Nomura Securities Co., Ltd. 6 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 2 Deutsche Securities Inc. 7 Barclays Capital Japan Limited 3 Mizuho Securities Co., Ltd. 8 RBS Securities Japan Limited 4 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. 9 Goldman Sachs Japan Co., Ltd. 5 Daiwa Securities Capital Markets Co. Ltd 10 Credit Suisse Securities Japan Limited . - 3 - 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. Note 3：The issue date of the Treasury Discount Bills auctioned on January 20,2011 is January 25,2011, and the maturity date is March 25,2011. Note 4：The issue date of the Treasury Discount Bills auctioned on March 22,2011 is March 25,2011, and the maturity date is May 25,2011. Issues Re-opened through the Recent Auctions for Enhanced-liquidity Issue Numbers Auction Date Securities Re-opened Amounts（billion yen. face value） ＃277 ＃278 ＃279 ＃280 ＃282 ＃284 ＃285 ＃287 ＃291 ＃292 12/16/ 2010 10-year 22.5 65.5 23.9 12.5 3.9 62.0 4.5 7.0 9.9 88.1 ＃86 ＃87 ＃88 ＃89 ＃93 ＃117 ＃6 ＃11 ＃12 ＃13 ＃14 ＃15 ＃16 ＃18 ＃20 ＃23 ＃24 ＃26 ＃28 13.0 1.0 4.0 28.3 1.0 7.8 23.0 1.1 0.1 2.2 22.4 20.3 3.2 34.0 1.3 8.0 0.1 4.7 20.1 ＃30 ＃31 ＃32 12/3/ 2010 20-year 30-year 62.2 40.0 2.0 ＃279 ＃280 ＃281 ＃284 ＃285 ＃58 ＃60 ＃61 ＃62 ＃63 ＃70 11/15/ 2010 10-year 20-year 40.2 53.2 30.2 26.0 13.3 4.0 2.0 37.2 30.6 31.1 31.8 ＃86 ＃87 ＃88 ＃89 ＃90 ＃93 ＃94 ＃99 ＃101 ＃107 ＃116 ＃117 ＃6 ＃18 ＃23 ＃26 ＃28 ＃30 ＃31 11/15/ 2010 20-year 30-year 84.7 17.1 16.7 27.5 3.8 27.7 62.0 0.1 5.0 0.2 22.3 15.1 7.3 0.2 2.0 5.0 0.9 1.0 1.1 ＃284 ＃84 10/25/ 2010 10-year 20-year 243.9 56.0 ＃86 ＃93 ＃94 ＃116 ＃117 ＃12 ＃14 ＃17 ＃18 ＃23 ＃28 ＃30 ＃31 10/1/ 2010 20-year 30-year 6.1 4.5 2.9 209.0 3.0 5.0 30.0 1.0 2.5 12.0 10.0 12.8 1.0 Note：Red shows 10-year, black shows 20-year and blue shows 30-year coupon-bearing bonds. Target Zones of the Auction for Enhanced-liquidity for the Fourth Quarter of FY 2010 Note ：JL shows 20‐year JGBs. JX shows 30‐year JGBs. Outstanding amount is at the end of December 2010. JGB Buy-back Results Remaining Years to Maturity ～1yr 1yr～5yr 5yr～10yr 10yr～20yr 20yr～ Coupon STRIPS Tota l December 2010 - 28.6 150.8 10.5 - - 189.9 November 2010 - 22.8 81.3 38.1 - - 142.2 October 2010 - 21.1 137.8 29.2 - - 188.1 - 4 - 0 500 1,000 1,500 2,000 2,500 3,000 3,500 JL89 JL90 JL91 JL92 JL93 JL94 JL95 JL96 JL97 JL98 JL99 JL100 JL101 JL102 JL103 JL104 JL105 JL106 JL107 JL108 JL109 JL110 JL111 JL112 JL113 JX01 JL114 JL115 JX02 JL116 JL117 JX03 JL118 JL119 JL120 JL121 JL122 JX04 JL123 JX05 JX06 JX07 JX08 JX09 JX10 JX11 JX12 JX13 JX14 JX15 JX16 JX17 JX18 JX19 JX20 JX21 JX22 JX23 JX24 JX25 JX26 JX27 JX28 JX29 JX30 JX31 JX32 JX33 (billion yen) Excluded issues Floating amount in the market (excluding amount issued by the Auction for Enhanced-liquidity) Amount issued b y the Auction for Enhanced-li q uidit y 3 THE AUCTION FOR ENHANCED-LIQUIDITY AND JGB BUY-BACK （billion yen） ①Remaining maturity : approx. 5-～15-year 5.5 （Remaining maturities） 9.5 12 15.5 ②Remaining maturity : approx. 15-～29-year 15.5 19.5 29.5 （Remaining maturities） 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 ～ 1Y 1Y ～ 5Y 5Y ～ 10Y 10Y ～ 20Y 20Y ～ Oct. to Dec. 2010 Jul. to Sep. 2010 Apr. to Jun. 2010 Jan. to Mar. 2010 （ years to maturity ） 276.6 69.1 53.6 81.4 2,005.2 369.9 400.5 519.6 715.2 503.0 168.0 150.1 107.1 77.8 （billion yen） 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 280 281 282 283 JL33 284 285 JL34 JL35 286 287 288 JL36 JL37 289 290 291 292 JL38 JL39 293 294 295 296 JL40 297 298 299 300 JL41 JL42 301 302 303 304 JL43 305 306 307 JL44 JL45 308 309 JL46 310 311 JL47 312 JL48 JL49 JL50 JL51 JL52 JL53 JL54 JL55 JL56 JL57 JL58 JL59 JL60 JL61 JL62 JL63 JL64 JL65 JL66 JL67 JL68 JL69 JL70 JL71 JL72 JL73 JL74 JL75 JL76 JL77 JL78 JL79 JL80 JL81 JL82 JL83 JL84 JL85 JL86 JL87 JL88 (billion yen) Excluded issues Floating amount in the market (excluding amount issued by the Auction for Enhanced-liquidity) Amount issued by the Auction for Enhanced-liquidity JGB Yield Curves Source: Japan Bond Trading Co. Yields of JGB Source: Japan Bond Trading Co. Long - Term Interest Rates （10Yr） Source: Bloomberg Long - Short Interest Spreads （30Yr - 10Yr） Source: Bloomberg - 5 - 4 JGB SECONDARY MARKET 0.0 0.5 1.0 1.5 2.0 2.5 0 5 10 15 20 25 30 35 40 ( years to maturity ) （ % ） 2010/9/30 2010/12/30 0.0 0.5 1.0 1.5 2.0 2.5 3.0 （ % ） 40-year bond 10-year bond 30-year bond 5-year bond 20-year bond 2-year bond ＜ 2006 ＞ ＜ 2007 ＞＜ 2008 ＞ ＜ 2009 ＞ ＜ 2010 ＞ -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 United Kingdom Germany United States Japan ＜ 2006 ＞ （ ％ ） ＜ 2007 ＞ ＜ 2008 ＞ ＜ 2009 ＞ ＜ 2010 ＞ -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 United Kingdom Germany United States Japan （ ％ ） ＜ 2006 ＞ ＜ 2007 ＞ ＜ 2008 ＞ ＜ 2009 ＞ ＜ 2010 ＞ Break-Even Inflation Rates Source: Japan; Japan Bond Trading Co., U.S.A., U.K.; Bloomberg Short-term Interest Rates of Treasury Discount Bills Note: The Interest rates of FBs (13-weeks, 6-months) and TBs (6-months, 1-year) are used up till Jan, 2009. Source: Japan Bond Trading Co. Short-term Interest Rates Source: Bank of Japan, Japan Banker Association JGB Over-the-Counter Trading Volume (TOKYO) Note: In February 2009, FBs (approx 2-month, 13-weeks, 6-months) and TBs (6-months, 1-year) are integrated into the Treasury Discount Bills. Source: Japan Securities Dealers Association - 6 - 0 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200 1,300 ( trillion yen ) Treasury Discount Bills Financing Bills Treasury Bills Medium Term Bonds Long Term Bonds ＜ 2006 ＞ ＜ 2007 ＞＜ 2008 ＞ ＜ 2009 ＞ ＜ 2010 ＞ 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 Treasury Discount Bills (3-month) Treasury Discount Bills (6-month) Treasury Discount Bills (1-year) （％） 2010/12/30 Recent Indicative Price Treasury Discount Bills (3-month) 0.125% Treasury Discount Bills (6-month) 0.130% Treasury Discount Bills (1-year) 0.140% ＜ 2009 ＞ ＜ 2006 ＞＜ 2007 ＞＜ 2008 ＞＜ 2010 ＞ -3.5 -3.0 -2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 10-yr BEI (Japan) 10-yr BEI (U.K.) 10-yr BEI (U.S.A.) （％） ＜ 2006 ＞＜ 2007 ＞ ＜ 2008 ＞ ＜ 2009 ＞ ＜ 2010 ＞ -0.05 0.05 0.15 0.25 0.35 0.45 0.55 0.65 0.75 0.85 0.95 ( ％ ) Call Rate (Uncollateralized Overnight) TIBOR 3-months (Euro-Yen) Basic Loan Rate ＜ 2006 ＞＜ 2007 ＞ ＜ 2008 ＞ ＜ 2009 ＞＜ 2010 ＞ General Bonds Issuance Amount and Outstanding Note 1: Issuance Amount: revenue basis, FY1999-2009: actual, FY2010: supplementary budget, FY2011: initial budget. Note 2: Outstanding: nominal basis, FY1999-2009: actual, FY2010-FY2011: estimates. Source: Ministry of Finance Time-to-maturity Structure of Outstanding JGB （September 2010） Source: Ministry of Finance Outstanding STRIPS Breakdown by JGB Holders （September 2010） Note: Outstanding STRIPS means outstanding amount of principal of Note: From preliminary figures of the end of December 2007, Banks, etc strippable JGBs held in stripped form. include Japan Post Bank, life and nonlife insurance include Japan Post Insurance. Source: Ministry of Finance Source: Bank of Japan Holding of JGBs by Foreign Investors JGB Holding by Retail Investors - 7 - 5 JGB OUTSTANDING Source: Bank of Japan 0.63 1.23 0.66 4.60 2.82 3.19 2.29 1.84 1.77 0.43 3.90 0.73 1.08 5.56 7.08 49.97 8.93 7.39 51.26 64.80 32.61 19.46 10.45 12.97 29.26 97.39 32.37 6.87 57.36 31.00 6.42 8.83 9.35 39.29 0 10 20 30 40 50 60 70 80 90 100 110 120 10 11 12 13 14 15 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 474849(FY) ( trillion yen ） Treasury Bills 2-yr bonds JGBs for retail investors (3-yr-Fixed-rate) JGBs for retail investors (5-yr-Fixed-rate) 5-yr bonds Inflation-Indexed bonds JGBs for retail investors (Floating-rate) 10-yr bonds 15-year-floating-rate bonds 20-yr bonds 30-yr bonds 40-yr bonds Average remaining years to maturity ： 6 years and 7months 0.0 100.0 200.0 300.0 400.0 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 （billion yen） STRIPS(2-year bonds) STRIPS(5-year bonds) STRIPS(10-year bonds) STRIPS(20-year bonds) STRIPS(30-year bonds) STRIPS(40-year bonds) 16.7 19.6 19.9 23.5 25.7 26.4 41.4 39.7 34.6 31.4 36.7 32.6 30.4 29.5 31.3 30.2 34.9 34.5 37.3 40.2 37.1 41.1 47.9 47.4 48.0 52.9 45.0 44.0 3.0% 3.5% 3.4% 3.9% 4.1% 4.1% 4.6% 4.5% 4.7% 4.5% 5.3% 5.1% 5.5% 6.0% 5.6% 6.1% 7.0% 6.8% 7.0% 5.8% 4.6% 4.6% 5.0% 5.1% 7.8% 6.5% 6.4% 6.1% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 03/12 04/03 04/06 04/09 04/12 05/03 05/06 05/09 05/12 06/03 06/06 06/09 06/12 07/03 07/06 07/09 07/12 08/03 08/06 08/09 08/12 09/03 09/06 09/09 09/12 10/03 10/06 10/09 0.0 10.0 20.0 30.0 40.0 50.0 60.0 (trillion yen) 331.7 367.6 421.1 457.0 499.0 526.9 531.7 667.6 392.4 594.0 545.9 541.5 642.3 155.6 127.1 124.6 135.6 136.8 119.9 110.3 104.6 89.3 86.3 77.6 142.4 146.7 0 25 50 75 100 125 150 175 99 00 01 02 03 04 05 06 07 08 09 10 11 ( FY ) ( trillion yen ) 100 200 300 400 500 600 700 800 ( trillion yen ) Outstanding (right-hand scale) Issuance Amount (left-hand scale) Households, 4.7% Foreigners, 5.0% Pension Funds, 3.8% Public Pensions, 10.7% Life and Nonlife Insurance, etc, 20.1% BOJ, 7.9% General Government, etc (ex Public Pensions), 0.5% Banks, etc, 44.4% Others, 2.9% (Note1) Outstanding “JGBs for retail investors” at Dec. 2010 is calculated to 〔aggregate issues of \33.6 trillion〕-〔redemption before maturity of \6.3trillion〕. (Note2) Figures in parenthesis indicator are issue numbers. (Source) Ministry of Finance, Bank of Japan “Flow of Funds” 3.3 4.8 6.5 8.4 10.1 12.4 14.0 15.3 17.1 20.7 22.0 23.2 24.1 25.8 26.5 26.7 26.8 27.4 27.5 27.6 27.5 27.7 27.7 27.2 27.3 27.4 27.2 12.7 12.5 12.4 13.4 14.6 15.9 18.0 20.1 21.8 24.5 25.7 26.9 28.0 29.1 31.4 32.3 33.4 33.6 35.4 36.0 36.3 35.3 35.8 36.7 36.0 35.6 35.5 35.0 34.4 34.4 2.0 18.7 0.4 0.7 1.0 4.7% 4.8% 5.0% 5.1% 5.2% 5.3% 5.3% 5.3% 5.3% 5.2% 5.2% 5.3% 4.8% 3.4% 3.2% 4.0% 3.7% 3.9% 2.4% 2.3% 2.4% 4.2% 4.7% 4.4% 2.3% 2.6% 2.8% 3.0% 5.0% 5.1% 5.3% 0 5 10 15 20 25 30 35 40 45 Mar - 03 (#1) Mar - 04 (#5) Mar - 05 (#9) Mar - 06 (#13) Mar - 07 (#17) Mar - 08 (#21) Mar - 09 (#25) Mar - 10 (#29) (trillion yen) -0.5% 0.5% 1.5% 2.5% 3.5% 4.5% 5.5% Total JGBs held by retail investors (left) Outstanding "JGBs for retail investors" (left) Ratio of JGBs held by retail investors （right） Dec - 10 34.1 Economic Indicators FY2010 FY2006 FY2007 FY2008 FY2009 Apr Jun. Jul Sep. Real GDP（chained 2000） 2.3 1.8 -4.1 -2.4 0.7 1.1 Domestic Demand (1.5) (0.6) -(2.9) -(2.7) (0.5) (1.1) Private Consumption 1.4 1.4 -2.2 0.0 0.3 1.2 Residential Investment -0.2 -13.5 -3.6 -18.2 -0.8 1.2 Non-Resi. Investment 4.7 0.8 -6.9 -13.6 2.7 1.3 Public Investment -8.8 -6.4 -6.8 14.2 -3.0 -1.0 Net Exports (0.8) (0.8) -(1.2) (0.3) (0.3) 0.0 Index of Industrial Production (2005 av.=100) 4.6 2.7 -12.7 -8.9 1.5 -1.8 Unemployment Rate 4.1 3.9 4.0 5.1 5.3 5.1 Note: Percent changes from previous period (quarterly figures are seasonally adjusted). The figures in（ ）indicate the contribution to change in GDP. Source: Cabinet Office; Ministry of Economy, Trade and Industry; Ministry of Internal Affairs and Communications Debt Securities Investment in Japan Prices by Non-Residents Source: Cabinet Office, Ministry of Internal Affairs and Communications, Source: Ministry of Finance Bank of Japan General Government Financial Balances （SNA Basis） General Government Gross Debts （SNA Basis） Note: For Japan and the U.S.A., where pension systems are based on a Source: OECD “Economic Outlook No. 88” Modified Funded System, the figures exclude social security funds, which are regarded as future liabilities in real terms Source: OECD “Economic Outlook No. 88” 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 - 8 - 6 ECONOMIC AND FINANCIAL TREND （％） ○ This printed matter was prepared using the paper that satisfies the judgment criteria of the basic policy under the Law Concerning the Promotion of Procurement of Eco-Friendly Goods and Services by the State and Other Entities (Law on Promoting Green Purchasing). ○ Indication of the recyclability : Recyclable to paper This printed matter was prepared using only the material fit for recycling to printing papers(Rank A) according to the judgment criteria“printing”of the basic policy under the Green Purchasing Law We will send a notice to you by e-mail when new information is updated on our website. For use of this service, please visit our website and register. (http://www.mof.go.jp/english/ehaisin/etop.htm) -9.0 -7.0 -5.0 -3.0 -1.0 1.0 3.0 5.0 7.0 9.0 （％） CGPI(Corporate Goods Price Index) CPI (Nationwide, excluding fresh food, including energy prices) GDP Deflator Change from the previous year ＜ 2006 ＞ 0.9% -0.5% -0.5% ＜ 2007 ＞＜ 2008 ＞＜ 2009 ＞＜ 2010 ＞ -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 ( trillion yen ) Money Market Instrument Bonds and Notes ＜2006＞ ＜2007＞ ＜2008＞ ＜2009＞ ＜2010＞ 30 50 70 90 110 130 150 170 190 210 99 00 01 02 03 04 05 06 07 08 09 10 11 12 Japan U.S.A. U.K Germany France Italy Canada （ CY ） （％） (As a percentage of GDP) -14.0 -12.0 -10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 99 00 01 02 03 04 05 06 07 08 09 10 11 12 Japan U.S.A. U.K. Germany France Italy Canada （％） （ＣＹ） （ As a p ercenta g e of GDP ） . WHAT’S NEW JGB Issuance Plan for FY2011 Ministry of Finance formulated and announced the JGB Issuance Plan for FY2011 in late December. the issuance plan are as follows. < Issue Amounts > JGB total issuance for FY2011 is planned to be 169.6 trillion yen, and the JGB market issuance