What’s New ⇒ Central Government Debt (As of December 31, 2016) Monthly Topic ⇒ 1 Quarterly Estimates of GDP Oct.-Dec. 2016

2 Real Wages Grew by 0.7% in 2016

WHAT’S NEW

Central Government Debt (As of December 31, 2016)

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

Outstanding government bonds and borrowings increased by 3.8 trillion

yen to 1,066.4 trillion yen from the end of September (1,062.6 trillion yen). This is because the total outstanding of FILP bonds increased by 2.2 trillion yen.

The Ministry of Finance www.mof.go.jp

The end of December 2016

(Actual)

The end of March 2017 (Estimate)

1) Outstanding Government Bonds and Borrowings

① General Bonds 826.4 845.3

② Fiscal Investment and Loan Program Bonds (FILP Bonds) 94.1 96.2

③ Borrowings, Subsidy Bonds, etc. 62.7 62.7

④ Financing Bills (FBs) 83.2 112.2

Total 1,066.4 1,116.4

2) Outstanding Government-Guaranteed Debts

Government-Guaranteed Debts 41.0 -

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

Mar. 2017 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 March 31, 2017 will be released on May 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/e201612.html

WHAT’S NEW

<Main Points>

1. Quarterly Estimates of GDP Oct.- Dec.2016

The first preliminary GDP estimate (Oct–Dec 2016) was released on Feb 13. Real GDP expanded by 0.2% (annual rate 1.0%) from the previous quarter. The growth was supported by foreign demand, which contributed 0.2% points. By demand item, Private Non-Residential Investment rose by 0.9% and Government Consumption

rose by 0.4% from the previous quarter while Private Consumption maintained the level of the previous quarter.

2. Real Wages Grew by 0.7% in 2016 According to the provisional report of the

monthly labour survey December 2016 announced by the Ministry of Health, Labour and Welfare on Feb 6, real wages grew by 0.7% in 2016, gaining for the first time in five years. Nominal wages increased by 0.5%, up for

three consecutive years, partially due to increasing special cash earnings (bonus and other special payments). Base pay hikes through last spring's

labor-management wage negotiations, known as shunto, also contributed to the nominal wage rise.

Development of Real GDP (Quarterly, seasonally adjusted series)

MONTHLY TOPIC

－2－

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

Source: Cabinet Office, Government of Japan

Note1

Note2

1.1

-0.4 -0.5

0.1

1.2 1.1

0.6

-0.2

1.2

-1.8

-0.2

0.6

1.4

-0.1

0.2

-0.3

0.6 0.40.3

0.2

-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 Ⅳ

2012 2013 2014 2015 2016

(％)

Private Demand Public DemandForeign Demand Real GDP

Contributions to change from the previous quarter (Seasonally adjusted)

Source: Ministry of Health, Labour and Welfare

-0.6

-1.9

-0.5-0.7

1.0

0.0

-1.1

-1.8

-2.6

1.3

0.1

-0.9-0.9

-2.8

-0.9

0.7

-1.6

-2.9

-0.7 -0.7

0.6 0.3

-1.0

-0.3

-3.9

0.5

-0.2

-0.9

-0.4

0.40.1 0.5

-5.0

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Real Wage Nominal Wage

(%, change from the previous year)

(CY)

Wage Growth

Note: Preliminary figure in 2016

(％)2015 2016

10～12 1～3 4～6 7～9 10～12-0.3 0.6 0.4 0.3 0.2 *** 1.0-0.3 0.2 0.5 -0.1 -0.0 *** -0.0

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

Excluding imputed Rent -0.9 0.4 0.2 0.3 -0.1 (-0.0) -0.4-1.0 1.4 3.3 2.4 0.2 (0.0) 0.70.5 -0.3 1.3 -0.3 0.9 (0.1) 3.8

(-0.1) (-0.2) (0.2) (-0.3) *** (-0.1) ***0.3 0.9 -0.7 0.0 -0.0 (-0.0) -0.20.7 1.4 -1.1 0.3 0.4 (0.1) 1.6

-1.5 -1.1 1.1 -0.7 -1.8 (-0.1) -6.9(0.0) (0.0) (-0.0) (-0.0) *** (0.0) ***(0.0) (0.3) (-0.0) (0.4) *** (0.2) ***

Private Residential InvestmentPrivate Non-Resi. InvestmentChange in Private Inventory

Public DemandGovernment ConsumptionPublic InvestmentChange in Public Inventory

Net Exports of Goods & Services

201610～12

Gross Domestic Product

Domestic Demand

Private DemandPrivate Consumption

Consumption of Households

In the third week of February, Mr. Shibata, director, Debt Management Policy Division of the Financial Bureau, and Mr. Kon, section chief of Overseas JGB Investor Relations, visited New York and Philadelphia to have meetings with various investors such as pension funds, asset management firms, hedge funds and insurance companies. It was the first time for MOF Japan to visit Philadelphia on an IR tour. We are grateful that investors shared their opinions on current market conditions.

Around the same time, Mr. Miyoshi, director of the International Organizations Division (former director of the Debt Management Policy Division), and Mr. Jinno, deputy director of the Debt Management Policy Division, participated in the 24th OECD Global Forum on Public Debt Management, which was held for the first time in 3 years and funded by the Japanese government. Debt managers from OECD member countries and non-OECD member countries actively exchanged views on policy challenges posed by the global macroeconomic environment, and many more topics. Mr. Miyoshi contributed to the discussion by making presentations on our bond markets and auction mechanisms.

Utilizing this opportunity in Paris, Mr. Jinno had discussions with investors on Japanese economic growth as well as actively joined other countries’ delegations for dinner to exchange opinions about recent market topics, resulting in body weight growth.

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)

12/1/2016 10-year 345 12/20/2026 0.1% 8,300.1 2,198.1 0.040% 0.032% 3.250 198.2 13.5 12/8/2016 30-year 53 12/20/2046 0.6% 2,064.6 723.9 0.633% 0.617% - 75.7 0.0 12/13/2016 5-year 130 12/20/2021 0.1% 9,738.0 2,174.7 ▲0.057% ▲0.063% - 224.7 65.5 12/15/2016 20-year 159 12/20/2036 0.6% 3,323.3 993.1 0.656% 0.645% - 105.9 142.2 12/27/2016 2-year 372 1/15/2019 0.1% 9,449.7 2,094.2 ▲0.154% ▲0.157% - 205.1 256.2 1/5/2017 10-year 345 12/20/2026 0.1% 7,781.1 2,165.4 0.059% 0.056% 0.967 232.5 210.8 1/11/2017 30-year 53 12/20/2046 0.6% 2,409.3 722.7 0.755% 0.745% - 76.6 0.0 1/17/2017 20-year 159 12/20/2036 0.6% 3,502.7 990.1 0.594% 0.589% - 108.8 115.2 1/19/2017 5-year 130 12/20/2021 0.1% 7,969.6 2,175.1 ▲0.104% ▲0.116% - 224.7 0.0 1/24/2017 40-year 9 3/20/2056 0.4% 1,494.5 499.5 0.865% - - - 10.4 1/30/2017 2-year 373 2/15/2019 0.1% 10,864.5 2,094.4 ▲0.171% ▲0.173% - 205.1 344.0 2/2/2017 10-year 345 12/20/2026 0.1% 7,846.7 2,170.3 0.092% 0.087% 0.967 228.3 0.0 2/7/2017 10-year Inflation-Indexed Bonds 21 3/10/2026 0.1% 1,042.6 399.9 ▲0.439% - - - 12.3 2/9/2017 30-year 53 12/20/2046 0.6% 2,339.0 723.2 0.920% 0.907% - 75.4 118.8 2/14/2017 5-year 130 12/20/2021 0.1% 9,262.2 2,174.6 ▲0.085% ▲0.089% - 224.6 358.9 2/23/2017 20-year 159 12/20/2036 0.6% 4,023.7 993.6 0.671% 0.669% - 105.3 164.0

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)

12/1/2016 3-month 649 3/13/2017 18,534.80 3,982.00 ▲0.3330% ▲0.3408% 418.00 12/7/2016 6-month 650 6/12/2017 9,916.55 3,181.37 ▲0.3523% ▲0.3603% 318.60 12/8/2016 3-month 651 3/21/2017 16,206.20 3,990.87 ▲0.3903% ▲0.4032% 419.10 12/15/2016 3-month 652 3/27/2017 14,181.00 4,011.25 ▲0.3925% ▲0.4196% 418.70 12/16/2016 1-year 653 12/20/2017 6,196.80 2,294.98 ▲0.3000% ▲0.3388% 205.00 12/21/2016 3-month 654 4/6/2017 14,995.90 4,022.87 ▲0.3952% ▲0.4125% 407.10 1/5/2017 3-month 655 4/10/2017 13,188.90 3,977.16 ▲0.3424% ▲0.3618% 412.80 1/6/2017 6-month 656 7/10/2017 11,283.90 2,911.16 ▲0.3400% ▲0.3501% 288.80 1/12/2017 3-month 657 4/17/2017 11,221.40 4,039.00 ▲0.2685% ▲0.3086% 381.00 1/18/2017 1-year 658 1/22/2018 9,646.40 2,265.29 ▲0.3261% ▲0.3350% 234.70 1/19/2017 3-month 659 4/24/2017 15,321.80 3,949.71 ▲0.2805% ▲0.2861% 400.20 1/26/2017 3-month 660 5/1/2017 12,896.90 4,002.54 ▲0.2525% ▲0.2733% 377.40 2/2/2017 3-month 661 5/8/2017 14,196.21 4,045.45 ▲0.2625% ▲0.2709% 384.50 2/8/2017 6-month 662 8/10/2017 9,393.90 2,895.68 ▲0.1853% ▲0.2235% 304.30 2/9/2017 3-month 663 5/15/2017 14,485.90 3,970.26 ▲0.1904% ▲0.2128% 419.70 2/15/2017 1-year 664 2/20/2018 11,027.50 2,262.09 ▲0.2513% ▲0.2613% 237.90 2/16/2017 3-month 665 5/22/2017 15,351.10 3,992.86 ▲0.2024% ▲0.2156% 407.10 2/23/2017 3-month 666 5/29/2017 15,557.40 4,024.57 ▲0.2505% ▲0.2593% 395.40

Auction Calendar for Feb. – Apr. 2017 Auction Date Issue Auction Date Issue Auction Date Issue Auction Date Issue

2/2(Thu) T-Bills (3-month) 2/23(Thu) 20-year 3/22(Wed) 40-year 4/18(Tue) T-Bills (1-year) 2/2(Thu) 10-year 2/28(Tue) 2-year 3/23(Thu) T-Bills (3-month) 4/18(Tue) 5-year 2/7(Tue) 10-year Inflation-Indexed Bonds 3/2(Thu) T-Bills (3-month) 3/28(Tue) Auctions for Enhanced-liquidity 4/20(Thu) T-Bills (3-month)

2/8(Wed) T-Bills (6-month) 3/2(Thu) 10-year 3/30(Thu) 2-year 4/20(Thu) 20-year

2/9(Thu) T-Bills (3-month) 3/7(Tue) 30-year 4/4(Tue) T-Bills (3-month) 4/25(Tue) Auctions for Enhanced-liquidity

2/9(Thu) 30-year 3/8(Wed) T-Bills (6-month) 4/4(Tue) 10-year 4/26(Wed) T-Bills (3-month) 2/14(Tue) 5-year 3/9(Thu) T-Bills (3-month) 4/5(Wed) T-Bills (6-month) 4/28(Fri) 2-year 2/15(Wed) T-Bills (1-year) 3/9(Thu) 5-year 4/6(Thu) T-Bills (3-month) 2/16(Thu) T-Bills (3-month) 3/14(Tue) T-Bills (1-year) 4/6(Thu) Auctions for Enhanced-liquidity 2/16(Thu) Auctions for Enhanced-liquidity 3/14(Tue) 20-year 4/11(Tue) 10-year Inflation-Indexed Bonds 2/21(Tue) Auctions for Enhanced-liquidity 3/15(Wed) T-Bills (3-month) 4/13(Thu) T-Bills (3-month) 2/23(Thu) T-Bills (3-month) 3/17(Fri) Auctions for Enhanced-liquidity 4/13(Thu) 30-year

Top 10 PDs by Total Purchase in Auctions (Calculated by Duration) (Jul. 2016 ～ Dec. 2016) 1 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. 6 Merrill Lynch Japan Securities Co., Ltd. 2 Daiwa Securities Co. Ltd. 7 BNP Paribas Securities (Japan) Limited 3 Nomura Securities Co., Ltd. 8 Goldman Sachs Japan Co., Ltd. 4 Mizuho Securities Co., Ltd. 9 SMBC Nikko Securities Inc. 5 Deutsche Securities lnc. 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 24 February 2017)

(Until 24 February 2017)

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

12/6/2016 732.1 399.7 +0.018% +0.035% 20-year(137,141,142,148,149,151,152,154,157) 30-year(7,19,20,21,23, 27,30,31,32,33,34,35,36,37,38,39,40,43,46,48,49,50,51) 40-year(2,4,8)

12/21/2016 1,798.8 498.5 ▲0.006% ▲0.003% 10-year(319,320,321,322,323,324,325,326,327,328,332,334,335,341,342) 20-year(55,64,67,68,69,70,72,75,76,79,80,84,92,95,96,117,128,129,130) 30-year(4,6)

1/13/2017 972.2 199.4 ▲0.013% ▲0.005%

2-year(361,363,364,367) 5-year(118 ,122) 10-year(291,294,295,302,310,312, 315,316,319) 20-year(38,40,44)

1/26/2017 1,871.9 499.2 +0.016% +0.020% 10-year(321,322,325,326,327,328,329,330,331,332,334,335) 20-year(55 ,70,78,83,88,89,93,94,95,96,99,106,134)

2/16/2017 927.1 399.6 +0.001% +0.010% 20-year(140,142,143,145,153,157,158) 30-year(11 ,12,17,19,21,22,26,27,36,41,42,44,45,46,47,48,49,50,51,52) 40-year(1,2,3,4,5,6,7,8)

2/21/2017 2,057.6 497.5 ▲0.005% ▲0.003% 10-year(321,322,323,324,325,326, 327,328,338) 20-year(56,58,60,61,64,66,72,73,76,77,83,84,85,87,95,121,129,134,136,138) 30-year(2,7)

Target Zones of the Auction for Enhanced-Liquidity for the Fourth 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

12/14/2016 86.1 20.1 ▲0.023 0.080 19,20,21

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 December 2016. Note.2： All issues in the graph above will be eligible afterward.

Buy-back Results

(Until 24 February 2017)

(Until 31 January 2017)

－5－

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

0500

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

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

JN36

9

JN37

0

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

JS12

9

317

318

JL52 31

9

320

JL53

JL54

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

321

322

JL55 32

332

4JL

56JL

57 325

JL58 32

632

7JL

59JL

60 328

JL61 32

9JL

62JL

63 330

331

JL64 33

2JL

65JL

66 333

JL67

JL68

JL69 33

4JL

70JL

71 335

JL72 33

633

7JL

73JL

74 338

JL75

JL76

JL77 33

9JL

78JL

79JL

80 340

JL81

JL82 34

1JL

83JL

84 342

JL85

JL86

JL87 34

3JL

88JL

89 344

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

6JX

7JL

137

JL13

8JL

139

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

0JX

8JL

141

JL14

2JX

9JL

143

JL14

4JX

10JL

145

JX11

JL14

6JX

12JL

147

JX13

JL14

8JX

14JL

149

JX15

JL15

0JX

16JL

151

JX17

JL15

2JX

18JL

153

JX19

JL15

4JX

20JL

155

JX21

JL15

6JX

22JL

157

JX23

JL15

8JX

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

51JX

52JU

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 Jan-17

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 Jan-17

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 Jan-17

Volatility Yield (right scale)

-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

2016/3/312016/6/302016/9/302016/11/302016/12/302017/1/31

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 5months) and the 10-Year Bonds (issue number 293 with current maturity of 1 years and 5months). 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 January 2017)

(Until 31 January 2017)

(Until 31 January 2017)

(Until 31 January 2017)

-3%

-2%

-1%

0%

1%

2%

3%

4%

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

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 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 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 January 2017)

-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

0

10

20

30

40

50

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

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

160

180

200

Apr 2013(Actual)

Jan 2017(Actual)

Monetary Base 155 435

JGBs 98 368

CP 1.4 2.3

Corporate Bonds 2.9 3.2

ETFs 1.7 11.8

J-REITs 0.13 0.36

Total Assets 175 482 0

50

100

150

200

250

300

350

400

450

500

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

Total AssetsMonetary BaseJGBs

QQE2QQE（trillion yen）

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 Jan

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

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

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

Foreigners

Net Purchase

Net Sale

2013 2014 2015 2016 2017

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

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

－8－

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 Jan-17

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

59.1

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

109.7 110.5 111.9

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 10.3

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)

%

%

%

%

%

%

%

%

%

%

%

10.3%

32.0%

47.9%

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 (The end of Sep. 2016 QE)

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 119.9 trillion yen

JGB Holders

Total 971.1 trillion yen

Total 1,091.0 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)

2.4

0.2%

Fiscal Loan Fund

0.0

0.0%

BOJ

356.8

36.7%

Banks,etc.

239.9

24.7%

Life and Non-life

Insurance

209.5

21.6%

Public Pensions

51.0

5.3%

Pension Funds

33.0

3.4%

Foreigners

55.1

5.7%

Households

13.3

1.4%

Others

10.1

1.0%

General Government

(ex Public Pensions)

0.0

0.0%Fiscal Loan Fund

0.0

0.0%

BOJ

56.7

47.3%

Banks,etc.

4.1

3.4%Life and Non-life Insurance

2.3

1.9%

Public Pensions

0.0

0.0%

Pension Funds

0.0

0.0%

Foreigners

56.8

47.4%

Households

0.0

0.0%

Others

0.0

0.0%

General Government

(ex Public Pensions)

2.4

0.2% Fiscal Loan Fund

0.0

0.0%

BOJ

413.5

37.9%

Banks,etc.

244.0

22.4%

Life and Non-life

Insurance

211.8

19.4%

Public Pensions

51.0

4.7%

Pension Funds

33.0

3.0%

Foreigners

111.9

10.3%

Households

13.3

1.2%

Others

10.1

0.9%

Types The amount of redemption at maturity Scheduled redemption date

20-Year Bonds 924.9 March 20

15-Year Floating-Rate Bonds 639.7 March 20

10-Year Bonds 8,539.7 March 20

10-Year Inflation-Indexed Bonds 106.9 March 10

5-Year Bonds 7,890.8 March 20

2-Year Bonds 2,699.4 March 15

Treasury Bill 2,000.0 March 21

Total 22,801.4

Source: Ministry of Finance

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

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 January 31, 2017)

(trillion yen)

Scheduled redemption of JGB at maturity in March, 2017

Note.1: The figures are based on the outstanding JGBs at the end of January, 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: About Inflation-Indexed Bonds, the amount of redemption at maturity is adopted the inflation-adjusted principal as of January 31, 2017. 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 0

100200300400500600700800900

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

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)

29.79

111.41

82.29

63.3368.46

49.71

35.9139.9439.35

42.35

26.55

10.6012.0514.2115.9615.5517.9817.9219.8419.0112.49

3.76 4.69 5.28 6.35 6.68 6.06 8.12 9.36 10.635.57

0.81 1.29 1.31 1.92 1.86 1.93 2.06 2.22 1.76

0

10

20

30

40

50

60

70

80

90

100

110

120

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 7 months

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)

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

(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

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

4.2

-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

2016

Q4

Primary Income Trade BalanceServices Secondary IncomeCurrent Account

4.3

-1.5 -1.8

0.4

4.9 4.32.3

-0.6

4.7

-7.1

-0.9

2.5

5.8

-0.4

0.8

-1.2

2.3 1.81.4

1.0

-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

2012 2013 2014 2015 2016

(％)

Private Demand Public Demand

Foreign Demand Real GDP

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

(CY)

0.3%

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

(%)

CPI

CPI excluding food (excludingalcohilic beverages) and energy

Change from the previous year

Apr.4, 2013BOJ released QQE

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）

Dec, 20161.43times

Dec, 20163.1％

Aug, 20090.42times

Jul, 20095.5％

Job opening-to-application ratio(right scale)

Unemployment rate(left scale)

-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－

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

Jan-

17

(2010 average=100・Seasonally Adjusted Index)

Production Shipments

Inventory Inventory Ratio

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

7 INFORMATION

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

－13－