This document details the easing measures for the requirements of the Bond Market Operation Support for specific issues of 10-year government bonds (Issues 369 and 370) concerning consecutive usage day limits, announced by the Bank of Japan's Financial Markets Department on August 29, 2025.
Content of Requirement Easing
Target Issues: Two issues of 10-year government bonds - Issue 369 and Issue 370 - are subject to the requirement easing measures. These issues function as cheapest-to-deliver (CTD) issues in futures markets and tend to experience particularly tight supply and demand conditions in repo markets.
Extension of Consecutive Usage Days: The upper limit for consecutive usage days, normally handled as "up to 50 business days in principle," is raised to "up to 80 business days in principle." This measure applies on a cumulative basis including consecutive usage up to the current date.
Implementation Period: The measure is scheduled to continue from September 1, 2025, for the time being.
Treatment of Other Issues
10-year Government Bond Issue 368: Normal treatment (up to 50 business days) will apply to new usage from September 1st onwards.
10-year Government Bond Issue 371: Normal treatment continues.
Continuation of Reduction Measures
Reduction measures for Bond Market Operation Support continue under the treatment indicated on June 17, 2025. As of the current time, issues with market holdings below 1.5 trillion yen (the upper limit for implementing reduction measures for each issue) include 10-year government bond Issues 362, 364, 366, 367, 368, and 369.
Policy Background and Significance
This measure aims to suppress excessive tightening of government bond supply and demand in repo markets and ensure market stability. It prevents repo market dysfunction caused by concentrated borrowing demand for specific issues, maintaining smooth functioning of the overall financial markets.
Future Policy Direction
The Bank of Japan has expressed its policy to carefully monitor the conditions of trading and lending transactions for cheapest issues and others in spot and repo markets, and to take additional measures as necessary to maintain market stability.
The report shows that the Bank of Japan is implementing requirement easing measures to address structural supply and demand tightness in government bond markets, with the purpose of improving borrowers' access to specific issues and maintaining stable repo market functioning.