Change in the Treatment of the Reduction in the Bank of Japan's Repurchase Amount under the Securities Lending Facility

Tokyo, June 17, 2025

In implementing the reduction in the repurchase amount, the Bank will take into account the impact on the supply and demand conditions of JGBs.

The Bank of Japan decided to implement measures regarding the Securities Lending Facility (SLF), including an expansion of the issues of Japanese government bonds (JGBs) applicable to the relaxed conditions for the reduction in the Bank's repurchase amount, from the viewpoint of improving liquidity in the JGB market.

1. JGB Issues Applicable to the Relaxed Conditions for the Reduction in the Repurchase

Amount under the SLF

	Before	After
Issues applicable to the relaxed conditions for the reduction in the repurchase amount	The cheapest-to-deliver (CTD) issues	10-year JGB issues3 maturing in and after 2031 of which the share of the Bank's holdings in the market exceeds 80 percent

2. Upper Limit on the Reduction of the Repurchase Amount under the SLF

When judging whether the reduction in the repurchase amount contributes to improving liquidity in the JGB market, the Bank, as before,4 continues to mainly take into account the amount outstanding of the applicable issues in the market. 5 It will accept counterparties' requests in principle until the amount outstanding of each of the applicable issues in the market recovers to about 1.5 trillion yen.

	Before	After
Upper limit on the reduction	Until the amount outstanding in the market recovers to about 1.2 trillion yen (Issues applicable: the CTD issues)	Until the amount outstanding in the market recovers to about 1.5 trillion yen (Issues applicable: the issues after the change as specified in 1. above)

In implementing the reduction in the repurchase amount, the Bank will take into account the impact on the supply and demand conditions of JGBs. From this perspective, when the Bank approves the reduction that contributes to improving liquidity in the JGB market, the upper limit will be set at about 200 billion yen per month.7

For further information, please contact the Market Operations Division, Financial Markets Department (post.fmd7@boj.or.jp).

Source Link:

https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2025/mpr250617c.pdf