Progress toward Resuming the Issuance of Inflation-Indexed Bonds pot

Ministry of Finance, Japan Quarterly Newsletter of the Ministry of Finance, Japan JAPANESE GOVERNMENT BONDS April 2012 Contents 1 What’s New 2 JGB Primary Market 3 The Auctions for

WHAT’S NEW

Progress toward Resuming the Issuance of Inflation-Indexed Bonds

suspended since October 2008, as the Lehman Shock in the same year brought about a

significant decline of liquidity in the market through increased needs for cash of the financial

institutions as well as prolonged future deflation expectations

In the JGB Issuance Plan for FY2012, the Ministry announced that "practical discussions

will be held with market participants on detailed product designs etc toward resuming the

issuance of Inflation-Indexed Bonds" Since February 2012, the Working Group for

Resumption of Issuance of Inflation-Indexed Bonds has been held among the market

participants and the Ministry After the series of discussions in the Working Group, the new

product designs for resumption have been formulated as follows

○ New Product Designs of Inflation-Indexed Bonds

The principal will be guaranteed at maturity (deflation floor) In case where the indexation

coefficient falls below 1 at maturity, the Bonds will be redeemed at the face value Other

※1 Inflation-Indexed Bonds are bonds whose principals fluctuate along with price of goods

※2 The number of decimal points of indexation coefficient will remain to be 3 for the time-being In response to the

request for smoothing the daily transitions of indexation coefficients, however, it will be expanded to 5 at the time

when a smooth shift from the current system is deemed to be possible along with the expected full operation of

the new BOJ-Net

※3 The bidding method of the competitive price auctions for the reopened issuances will remain the same as the

current method for the time-being; bidders are supposed to tender with prices which are multiplied by the inflation

coefficients In response to the requests that the bidding method should be compromised with the market practice

where the bidders tender with the prices without multiplying them by the inflation coefficients, however, it is

planned that a potential revision of the bidding method will be discussed soon after the expected full operation of

the new BOJ-Net

○ Timing of Resumption

The discussions will be continued at the abovementioned Working Group, the Meeting of

JGB Market Special Participants and the Meeting of JGB Investors The resumption of

issuance is then projected with appropriate conditions in place.

Ministry of Finance, Japan

Quarterly Newsletter of the Ministry of Finance, Japan

JAPANESE GOVERNMENT BONDS

April 2012 Contents

1 What’s New

2 JGB Primary Market

3 The Auctions for Enhanced-Liquidity and JGB Buy-Back

4 JGB Secondary Market

5 JGB Outstanding

6 Economic and Financial Trends

Face Value × × Coupon Rate ×

Future Product Designs

of Inflation-Indexed Bonds

１．Maturity： １０ years

The principal (face value) will be guaranteed

at maturity (from issue number 17)

５．Interest Payment： Biannual

(Hereinafter referred to as “CPI”)

１ ２

ＣＰＩat Interest Payment ＣＰＩat Issuance ６．Interest Amount：

Inflation-Adjusted Principal

３．Ref Index： Consumer Price Index

２．Features： Pre-fixed coupon rate (increments of 0.1%）

The principal fluctuates along with price of goods

４．Deflation Floor：

Indexation Coefficient

(Composite index of all items excluding fresh foods)

Deflation Floor (Conceptual Diagram)

①In case where the indexation coefficient is below 1, the inflation-adjusted principal will fall below its face value

②In case where the indexation coefficient at maturity is above 1, the principal and the interest will be paid based on the inflation-adjusted principal per se

③In case where the indexation coefficient at maturity is below 1, principal will be redeemed at its face value

(Note) Deflation floor has no effect on interests during the maturing period or at maturity

1

Indexation

Issuance of the Reconstruction Supporters’ Bonds

for Retail Investors

With a view to encouraging a wide range of public to fund expenditures for reconstruction from the Great East

Japan Earthquake, the Ministry started to offer the Reconstruction Bonds for Retail Investors (10-Year

Floating-Rate, 5-Year Fixed-Rate and 3-Year Fixed-Rate) since December 2011 In addition, the Ministry has

also started to offer the Reconstruction Supporters’ Bonds for Retail Investors with new product characteristics since March 2012 (issued in April) The Reconstruction Supporters’ Bonds for Retail Investors, while based on the basic product features of 10-Year Floating-Rate JGBs for Retail Investors, set a lower interest rate for the first three years (0.05%, the lowest applicable rate in JGBs for Retail Investors) in order to call retail investors

who are willing to financially support reconstruction projects from the Great East Japan Earthquake

Newly issued Commemorative Coins for the Great East Japan Earthquake Reconstruction Projects will be given to the bondholders of the Reconstruction Supporters’ Bonds for Retail Investors; a gold coin worth

10,000 yen per balance of the bond holding of 10 million yen, and a silver coin worth 1,000 yen per balance of the bond holding of one million yen as of the interest payment date three years after the issue date of the bonds

The Commemorative Coins for the Great East Japan Earthquake Reconstruction Projects are issued with our

wishes that the victims of the disaster would rest in peace and for the fast recoveries from the destruction in the future It is expected that the issuance of the coins will give momentum to the efforts toward the renaissance of the country through recoveries based on mutual supports and solidarities of the people

The following are the features of the Coins which will be given to the bondholders of the Reconstruction Supporters’ Bonds for Retail Investors (issue number 801), offered in March 2012 The designs of the coins vary depending on the issues (months of issuances) Each issue of the Reconstruction Supporters’ Bonds for Retail Investors is associated with unique designs for the gold and silver coins, respectively

Offering of the next issue of the bonds (issue number 802) is scheduled in June 2012

Denomination 10,000 yen

(Images are one and a half times actual size)

1,000 yen (Images are actual size)

Individual side

Reconstruction special areas and pigeons Big fishing boat and ears of rice

Common side

Solitary pine tree of a Miracle and pigeons

Solitary pine tree of a Miracle

and pigeons Material Pure gold Pure silver Weight 15.6g（1/2 troy ounce） 31.1g（1 troy ounce）

The Design (image) of the Commemorative Coins for the Great East Japan Earthquake Reconstruction Projects (First series)

－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) 1/12/2012 10-year 320 12/20/2021 1.0% 5,999.3 2,005.5 0.966% 0.965% 5.931 187.6 327.5 1/17/2012 30-year 35 9/20/2041 2.0% 2,258.3 641.7 1.918% 1.915% - 57.4 13.0 1/19/2012 5-year 102 12/20/2016 0.3% 9,938.9 2,276.8 0.333% 0.333% 2.996 219.6 322.0 1/26/2012 20-year 133 12/20/2031 1.8% 3,178.2 1,005.0 1.745% 1.744% - 93.8 3.4 1/31/2012 2-year 313 2/15/2014 0.1% 13,460.5 2,516.9 0.130% 0.128% 2.399 179.6 271.6 2/ 2/2012 10-year 320 12/20/2021 1.0% 7,439.2 2,000.1 0.964% 0.963% 4.760 194.3 328.2 2/ 9/2012 40-year 4 3/20/2051 2.2% 1,443.9 399.5 2.140% - - - 36.4 2/16/2012 5-year 102 12/20/2016 0.3% 8,924.5 2,296.0 0.297% 0.295% 1.554 201.7 102.9 2/23/2012 20-year 133 12/20/2031 1.8% 2,791.8 1,002.3 1.759% 1.755% - 96.6 0.0 2/28/2012 2-year 314 3/15/2014 0.1% 12,882.6 2,503.9 0.112% 0.111% 1.952 193.2 0.0 3/ 1/2012 10-year 321 3/20/2022 1.0% 6,505.3 1,996.6 0.974% 0.973% 8.912 193.5 230.9 3/ 6/2012 30-year 36 3/20/2042 2.0% 2,544.9 641.6 1.968% 1.964% - 57.4 86.7 3/ 8/2012 5-year 103 3/20/2017 0.3% 8,595.8 2,300.8 0.295% 0.293% 2.584 195.7 0.0 3/15/2012 20-year 134 3/20/2032 1.8% 3,256.4 999.7 1.803% 1.795% - 99.5 27.1 3/29/2012 2-year 315 4/15/2014 0.1% 14,088.5 2,508.7 0.117% 0.117% 1.230 189.1 117.2

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) 1/6/2012 3-month 248 4/9/2012 35,510.82 5,510.41 0.0995% 0.0966% 489.50 1/10/2012 6-month 249 7/10/2012 21,965.00 3,239.40 0.1020% 0.1020% 260.50 1/11/2012 3-month 250 4/16/2012 32,110.00 5,511.35 0.1002% 0.1002% 448.50 1/17/2012 1-year 251 1/21/2013 14,330.20 2,321.46 0.1045% 0.1035% 178.45 1/18/2012 3-month 252 4/23/2012 56,742.50 5,557.43 0.1002% 0.0994% 472.40 1/20/2012 Approx 2-month 253 3/23/2012 31,651.10 2,324.46 0.0975% 0.0956% 175.45 1/25/2012 3-month 254 4/27/2012 44,926.00 5,649.07 0.1016% 0.1012% 370.78 2/1/2012 3-month 255 5/7/2012 51,965.70 5,568.16 0.1023% 0.1007% 431.63 2/7/2012 6-month 256 8/10/2012 35,143.60 3,227.01 0.1023% 0.1003% 272.80 2/8/2012 3-month 257 5/14/2012 74,912.00 5,510.05 0.1023% 0.1015% 459.80 2/10/2012 Approx 2-month 258 4/9/2012 28,254.50 2,306.11 0.1014% 0.1007% 193.80 2/13/2012 1-year 259 2/20/2013 11,030.40 2,294.09 0.1048% 0.1038% 205.85 2/15/2012 3-month 260 5/21/2012 41,408.30 5,451.36 0.1023% 0.1015% 508.54 2/22/2012 3-month 261 5/28/2012 47,796.30 5,545.88 0.1043% 0.1035% 473.90 2/29/2012 3-month 262 6/4/2012 58,923.20 5,573.15 0.1043% 0.1039% 426.70 3/6/2012 6-month 263 9/10/2012 34,336.60 3,217.80 0.1026% 0.1026% 282.10 3/7/2012 3-month 264 6/11/2012 73,424.80 5,556.28 0.1043% 0.1027% 483.54 3/14/2012 3-month 265 6/18/2012 45,700.70 5,595.05 0.1023% 0.1023% 404.87 3/15/2012 1-year 266 3/21/2013 10,401.40 2,345.77 0.1041% 0.1031% 154.10 3/19/2012 Approx 2-month 267 5/25/2012 26,419.40 2,296.40 0.1014% 0.1008% 203.50 3/21/2012 3-month 268 6/25/2012 46,414.70 5,499.18 0.1023% 0.1019% 490.70 3/23/2012 3-month 269 7/2/2012 39,200.30 5,517.03 0.1018% 0.1018% 512.90

Auction Calendar for Apr – Jun 2012

Auction Date Issue Auction Date Issue Auction Date Issue Auction Date Issue 4/ 3 (Tue) 10-year 4/24 (Tue) T-Bills(3-month) 5/17 (Thu) 5-year 6/ 7 (Thu) 30-year

4/ 4 (Wed) T-Bills(3-month) 4/24 (Tue) 20-year 5/22 (Tue) T-Bills(Approx.2-month) 6/12 (Tue) 5-year

4/ 5 (Thu) T-Bills(6-month) 4/26 (Thu) T-Bills(3-month) 5/22 (Tue) Auction for Enhanced-liquidity 6/13 (Wed) T-Bills(Approx.2-month) 4/ 5 (Thu) Auction for Enhanced-liquidity 4/26 (Thu) 2-year 5/24 (Thu) T-Bills(3-month) 6/14 (Thu) T-Bills(3-month) 4/ 9 (Mon) T-Bills(Approx.2-month) 5/ 8 (Tue) 10-year 5/24 (Thu) 20-year 6/14 (Thu) 20-year

4/11 (Wed) T-Bills(3-month) 5/ 9 (Wed) T-Bills(6-month) 5/29 (Tue) 2-year 6/18 (Mon) T-Bills(1-year) 4/12 (Thu) 30-year 5/10 (Thu) T-Bills(3-month) 5/31 (Thu) T-Bills(3-month) 6/21 (Thu) T-Bills(3-month) 4/17 (Tue) T-Bills(1-year) 5/10 (Thu) Auction for Enhanced-liquidity 6/ 1 (Fr i) Auction for Enhanced-liquidity 6/21 (Thu) Auction for Enhanced-liquidity 4/17 (Tue) 5-year 5/15 (Tue) 40-year 6/ 5 (Tue) 10-year 6/26 (Tue) 2-year

4/18 (Wed) T-Bills(3-month) 5/16 (Wed) T-Bills(1-year) 6/ 6 (Wed) T-Bills(6-month) 6/28 (Thu) T-Bills(3-month) 4/19 (Thu) Auction for Enhanced-liquidity 5/17 (Thu) T-Bills(3-month) 6/ 7 (Thu) T-Bills(3-month)

Total Bidding Amount of JGBs （Calculated by Duration） Top 10

（Oct 2011 ～ Mar 2012）

1 Mitsubishi UFJ Morgan Stanley Securities Co., Ltd 6 Daiwa Securities Co., Ltd

4 The Bank of Tokyo-Mitsubishi UFJ, Ltd 9 RBS Securities Japan Limited

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 April 9, 2012 is April 13, 2012, and the maturity date is June 4,2012

Note 4: The issue date of the Treasury Discount Bills auctioned on May 22, 2012 is May 25, 2012, and the maturity date is July 25,2012

Note 5: The issue date of the Treasury Discount Bills auctioned on June 13, 2012 is June 15, 2012, and the maturity date is August 2,2012

Issues Re-opened through the Recent Auctions for Enhanced-Liquidity

Issue Numbers Auction Date Securities

Re-opened Amounts（billion yen face value）

＃287 ＃290 ＃291 ＃292 ＃293 ＃294 ＃295 ＃302 ＃311 ＃312 ＃61 3/27/ 2012 10-year

20-year 0.4 9.7 32.5 0.5 8.2 5.0 61.3 0.4 170.5 10.0 0.5

＃101 ＃102 ＃111 ＃116 ＃122 ＃126 ＃128 ＃129 ＃4 ＃5 ＃7 ＃8 ＃15 ＃16 ＃17 ＃18 ＃20 ＃22 ＃26

3/22/ 2012 20-year

30-year 5.0 6.9 10.0 12.0 10.3 24.5 26.5 20.0 8.0 0.9 3.0 7.0 0.6 114.2 0.2 30.7 4.0 10.7 4.9

＃290 ＃291 ＃295 ＃300 ＃308 ＃311 ＃316 ＃55 ＃57 ＃58 ＃60 ＃61 ＃68 ＃70 ＃74 ＃87 ＃88 2/21/ 2012 10-year

20-year 88.2 7.3 1.1 10.0 26.0 90.1 4.0 2.9 15.1 0.1 9.7 15.2 4.9 0.2 2.0 21.5 0.1

＃125 ＃4 ＃7 ＃8 ＃9 ＃11 ＃13 ＃16 ＃17 ＃18 ＃19 ＃20 ＃21 ＃22 ＃24 ＃25 ＃26 ＃31 ＃32

2/7/ 2012 20-year

30-year 5.0 7.7 29.1 26.5 1.0 1.0 11.1 0.6 20.0 78.0 0.6 9.2 16.5 62.5 6.0 12.1 1.3 1.0 10.3

＃287 ＃291 ＃300 ＃302 ＃306 ＃316 ＃55 ＃58 ＃62 ＃67 ＃76 ＃82 ＃87 ＃91 ＃94 1/23/ 2012 10-year

20-year 82.8 7.6 93.8 14.3 2.2 62.7 11.7 2.0 0.5 4.6 1.0 0.5 12.9 2.0 0.5

＃125 ＃7 ＃8 ＃11 ＃13 ＃14 ＃15 ＃17 ＃18 ＃20 ＃21 ＃26 ＃32

1/6/ 2012 20-year

30-year 18.7 13.0 25.0 0.5 51.4 81.9 3.0 29.5 16.0 5.5 38.9 15.0 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 First Quarter of FY 2012

JGB Buy-Back Results

Remaining Years to Maturity ～1yr 1yr～5yr 5yr～10yr 10yr～20yr 20yr～ STRIPS Coupon Total

Note：Figures include JGB Buy-back from the Bank of Japan

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

（billion yen）

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

Jan to Mar 2012 Oct to Dec 2011 Jul to Sep 2011 Apr to Jun 2011 624.4

（years to maturity）

（billion

876.4

2,359.6

185.3

601.0 121.2

161.3 63.5

31.7

60.3 56.4 531.5

602.7

－4－

Note1： JL shows 20‐year JGBs JX shows 30‐year JGBs Outstanding amount is as of the end of March 2012

Note2： Based on the result of the consultation to the JGB Market Special Participants which takes place at the time of each auction, 60 issues from each of the above 2 groups are selected as targeted issues (excluding JL56,57 from ① and JX7 from ② for the auctions in June,respectively)

0

500

1,000

2,000

3,000

4,000

5,000

6,000

7,000

JL 29 29 JL

JL 30 30 JL

JL 31 JL

JL JL JL JL JL JL JL JL JL JL JL JL JL JL JL JL JL JL JL JL JL JL JL

(billion yen) Outstanding amount in the market (excluding amount issued

by the Auction for Enhanced-Liquidity) Amount issued by the Auction for Enhanced-Liquidity

0

500

1,000

1,500

2,000

2,500

3,000

3,500

JX01 JL1

JX02 JL1

JX03 JL1

JX04 JL1

JX05 JL1

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 JX34 JX35

(billion yen) Outstanding amount in the market (excluding amount issued

by the Auction for Enhanced-Liquidity) Amount issued by the Auction for Enhanced-Liquidity

29.5 19.5

15.5

(Remaining maturities)

(Remaining maturities)

②Remaining maturity : approx.15‐～29‐year

①Remaining maturity : approx.5‐～15‐year

4 JGB SECONDARY MARKET

JGB Yield Curves

Source: Japan Bond Trading Co

Yields of JGB

Long - Term Interest Rates （10Yr）

Source: Japan Bond Trading Co

Long - Short Interest Spreads （30Yr - 10Yr）

Source: Bloomberg

(years to maturity) 0.0

0.5

1.0

1.5

2.0

2.5

2011/12/30 2012/3/30

40 35

30

15 10

5 0

(%)

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

（％）

<2008> <2009> <2010> <2011> <2012>

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

（％）

<2008> <2009> <2010> <2011> <2012>

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

<2008> <2009> <2010> <2011> <2012>

Break-Even Inflation Rates

Source: Japan; Japan Bond Trading Co., U.S., U.K.; Bloomberg

Short-Term Interest Rates of Treasury Discount Bills

Short-Term Interest Rates

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

Source: Bank of Japan, Japan Bankers 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－

0.00

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)

（％）

2012/3/30 Recent Indicative Price Treasury Discount Bills (3-month) 0.100% Treasury Discount Bills (6-month) 0.100%

Treasury Discount Bills (1-year) 0.100%

-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

<2012>

(%)

-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.)

（％）

<2008> <2009> <2010> <2011> <2012>

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

Treasury Discount Bills Financing Bills Treasury Bills Medium Term Bonds Long Term Bonds

<2008> <2009> <2010> <2011>

(trillion yen)

<2012>

5 JGB OUTSTANDING

Note: Outstanding STRIPS means outstanding amount of principal of

strippable JGBs held in stripped form

Source: Ministry of Finance

General Bonds Issuance Amount and Outstanding

Time-to-Maturity Structure of Outstanding JGB （December 2011）

Source: Ministry of Finance

Outstanding STRIPS

Note 1: Issuance Amount: revenue basis, FY2000-2010: actual, FY2011: fourth supplementary budget, FY2012: initial budget

Note 2: Outstanding: nominal basis, FY2000-2010: actual, FY2011-FY2012: estimates

Source: Ministry of Finance

Breakdown by JGB Holders （December 2011,QE）

Note1 : "JGB" includes FILP Bonds, does not include T-Bills

Note2 : "Banks, etc" includes Japan Post Bank, "Securities investment trust" and "Securities Companies"

Note3 : "Life and Nonlife insurance" includes Japan Post Insurance

Source: Bank of Japan

Source: Bank of Japan Note: Outstanding "JGBs for retail investors" at March-12 is calculated to 〔aggregate

issues of ¥36.3 trillion〕-〔redemption before maturity of ¥8.5 trillion〕-〔aggregate redemption money of ¥4.9 trillion〕

Other figures based on Bank of Japan “Flow of Funds” statistics

Source: Ministry of Finance, Bank of Japan

(trillion yen)

708.9

421.1

636.3 594.0

545.9

675.5

541.5 531.7

526.9 499.0

457.0 392.4

367.6

142.4 127.1

124.6 135.6

136.8 119.9

110.3 104.6

89.3 86.3

143.1 165.0

159.2

0

25

50

75

100

125

150

175

100 200 300 400 500 600 700

800 Outstanding (right-hand scale)

Issuance Amount (left-hand scale)

16.7

20.0 19.2

23.625.6

26.8

40.9 38.4 34.4 31.0

50.9 49.0

43.2

36.6 35.8 37.6 33.3 32.4

30.2 31.2 30.0 34.9 34.4 37.1 41.4 37.8 43.1 47.7 47.447.6 53.9

44.8 43.6

3.0%

3.5%

3.3%

3.9%4.1% 4.2%

4.9%

4.6% 4.6% 4.5%

5.3%

5.1%

5.5%

6.1%

5.7%

6.4%

7.0%

6.8%7.0%

5.7%

4.6%4.7%

5.0%

6.5%6.7%

5.8%

4.9%

5.2%

5.1%

7.9%

6.4% 6.4%

6.1%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Dec-03 Sep-04 Jun-05 Mar-06 Dec-06 Sep-07 Jun-08 Mar-09 Dec-09 Sep-10 Jun-11

0.0 10.0 20.0 30.0 40.0 50.0

60.0

(trillion yen)

1.29 1.25 1.23 2.30 5.38 4.20 2.97 3.42 2.53 2.67 1.43 2.14 4.70 0.73

8.58 7.03

57.40

9.23 7.49

28.48

72.84

30.89

22.65

13.53 14.26 32.91

111.94

37.18

9.19

57.72

32.08

7.05 9.54 10.51 45.65

0

10

20

30

40

50

60

70

80

90

100

110

120

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 41 47 48 49 50(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-yr-floating-rate bonds 20-yr bonds

30-yr bonds 40-yr bonds

Average remaining years to maturity： 6 years and 11 months

0.0

100.0

200.0

300.0

400.0

Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12

STRIPS(2-year bonds) STRIPS(5-year bonds)

STRIPS(10-year bonds) STRIPS(20-year bonds)

STRIPS(30-year bonds) STRIPS(40-year bonds)

(billion yen)

3.3 4.8 6.5 8.4 10.1 12.4 14.0 15.3 17.1 20.7 22.0 23.224.1 25.826.5 26.7 26.8 27.4 27.5 27.6 27.5 27.7 27.7 27.2 27.3 27.4 27.2

25.825.2 24.1 23.4 22.9

12.7 12.5 12.413.4 14.615.9 18.0 20.1 21.8 24.525.7 26.928.0 29.1 31.432.3 33.4 33.6 35.4 36.036.335.3 35.8

36.7 36.0 35.6 35.535.0 34.4 34.4 34.1 33.0 31.130.4 29.5 28.5

2.0

18.7

0.40.7 1.0

4.3%

4.1%

3.9% 3.8% 4.5%

4.9%

5.0%

5.2%

5.2%

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%

5.0% 5.1%

5.3%

0 5 10 15 20 25 30 35 40 45

Mar - 03 Mar - 04 Mar - 05 Mar - 06 Mar - 07 Mar - 08 Mar - 09 Mar - 10 Mar - 11 Mar - 12

-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)

(trillion yen)

Households 28.5 Foreigners 50.9 Pension Funds 28.5 Public Pensions 69.7

Life and Nonlife Insurance 169.1

Banks, etc.

312.7

Fiscal Loan Fund 0.8 0.1%

BOJ 67.6

Others 25.8

General Government (ex Public Pensions) 1.8 0.2%

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

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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

FY2010 FY2007 FY2008 FY2009 FY2010

Apr.-Jun Jul.-Sep Oct.-Dec

Index of Industrial Production (2005 av.=100) 2.7 -12.7 -8.8 8.9 -6.8 -2.1 -2.8

（％）

6 ECONOMIC AND FINANCIAL TRENDS

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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 Internal Affairs and Communications; Ministry of Economy, Trade and Industry

Source: Cabinet Office, Ministry of Internal Affairs and Communications,

Bank of Japan

Source: Ministry of Finance

Note: For Japan and the U.S.A., where pension systems are based on a

Modified Funded System, the figures exclude social security funds,

which are regarded as future liabilities in real terms

Source: OECD “Economic Outlook No 90”

Source: OECD “Economic Outlook No 90”

Economic Indicators

－8－

-14.0

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

00 01 02 03 04 05 06 07 08 09 10 11 12 13

Japan U.S.A U.K.

Germany France Italy

Canada

（CY）

30 50 70 90 110 130 150 170 190 210 230

00 01 02 03 04 05 06 07 08 09 10 11 12 13

Japan U.S.A U.K Germany France Italy Canada

（CY）

（％） (As a percentage of GDP)

-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

0.6%

0.1%

-1.8%

<2010> <2011>

<2007> <2008> <2009>

-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6

7(trillion yen)

Money Market Instrument Net Bonds and Notes Net

<2007> <2008> <2009> <2010> <2011>