October 2026 Market Operations Meeting Summary

The meeting was held at the Bank of Japan Head Office starting at 17:30. It was attended by market division executives and operational managers from counterparties eligible for operations for which the Head Office serves as the trading and lending office. The Bank of Japan was represented by the Director-General of the Financial Markets Department and the heads of the General Affairs, Market Operations, and Market Planning divisions.

The titles of the materials were: “Recent Developments in Financial Markets and the Conduct of Market Operations” (Material 1); “Liquidity and Functioning of the JGB Market” (Material 2); and “Developments in Japan’s Money Market: Results of the Tokyo Money Market Survey (August 2026)” (Material 3). The meeting included opening remarks by the Director-General of the Financial Markets Department, explanations by the Bank of Japan, and a question-and-answer session.

In light of usage of the operations to support financial institutions in disaster areas, the Great East Japan Earthquake will cease to be an eligible disaster for those operations following the lending in May 2027.

The plan for JGB purchases presented at the June 2026 Monetary Policy Meeting was based on the principle that long-term interest rates are formed in financial markets, and called for purchases in a predictable manner while retaining flexibility to ensure market stability. The existing plan will remain in place through March 2027, with purchases reduced by about 200 billion yen each quarter in principle; from April 2027 onward, purchases will be about 2 trillion yen per month. If long-term interest rates rise rapidly, the Bank will act nimbly, including by increasing purchase amounts, and will review the pace at a Monetary Policy Meeting as necessary.

The total monthly offering amount for coupon-bearing JGBs will move from 2 trillion 900 billion yen in January–March 2026 to 2 trillion 705 billion yen in April–June, 2 trillion 500 billion yen in July–September, and 2 trillion 300 billion yen in October–December. The October–December 2026 breakdown by remaining maturity is 6,600 billion yen for over 1 year through 3 years, 5,800 billion yen for over 3 years through 5 years, 6,100 billion yen for over 5 years through 10 years, 1,700 billion yen for over 10 years through 25 years, and 1,500 billion yen for over 25 years. Inflation-indexed bonds: 300 billion yen.

The revisions to the Securities Lending Facility were announced on June 16, 2026. Consecutive sales of coupon-bearing JGBs to the same counterparty will generally be limited to a maximum of 30 business days; for Treasury Discount Bills, the existing maximum of 5 business days in principle remains. The period may be extended if the Bank of Japan considers it necessary. The following arrangements will continue: two offers per day; in principle, eligible securities comprise coupon-bearing JGBs and Treasury Discount Bills held by the Bank; a per-issue sales limit of 100% of holdings; and a maximum of 30 issues for bids.

The September 18, 2026 Monetary Policy Meeting statement said that the lending rate for the Climate Response Financing Operations would be changed to a variable rate and that limits would be set on total lending and other amounts. Lending rates for the operations to support financial institutions in disaster areas and the Funds-Supplying Operations against Pooled Collateral would also be revised. For the Climate Response Financing Operations, the Bank explained that it took into account smooth conduct of money market operations and stable support for private-sector climate change initiatives.

The Tokyo Money Market Survey began in 2008 to capture transaction trends and other developments in the money market. The reference date for this survey was the end of July 2026. Participants included counterparties eligible for Bank of Japan operations, major life and non-life insurance companies, and large investment trust management companies. The number of survey respondents fell from 383 in August 2025 to 381 in August 2026; among them, operation counterparties declined from 355 to 354. The materials present balances by type of funding and investment, repo and call transactions, and assessments of market functioning. They also asked about current and expected transactions for liquidity management within the next two years.

Funding-side and investment-side balances do not match because of survey scope limitations and other factors. Nonresidents and others are excluded; transactions with the Bank of Japan are counted on the funding side, while Treasury Discount Bills are counted only on the investment side. The liquidity management questions distinguish regular or periodic funding from funding as needed, and cover the outlook over the next two years.