Principal Terms and Conditions concerning Outright Purchases and Purchases under Resale Agreements of JGSs from Foreign Central Banks

July 10, 1998 (July 10, 1998)

Revision:October 8, 2002 (November 11, 2002)
November 14, 2003 (January 19, 2004)
January 23, 2009 (February 4, 2009)
* Date of implementation in brackets

The Bank of Japan (hereinafter the "BOJ") shall conduct purchases of Japanese government securities (hereinafter the "JGSs"), either outright or under resale agreements (hereinafter the "Purchases"), pursuant to Article 5, items 1 and 2 of the Ordinance for Enforcement of the Bank of Japan Act. The operational procedures of the Purchases shall be managed under the following terms and conditions (hereinafter these "Principal Terms and Conditions").

1. Conclusion of Agreements

The BOJ shall conclude agreements in accordance with these Principal Terms and Conditions (hereinafter the "Agreements") with foreign central banks and institutions equivalent thereto selected from among those holding Securities Custody Accounts (S) with the BOJ (hereinafter the "Counterparty Central Banks").

2. JGSs to Be Purchased

The BOJ shall purchase the following JGSs that were originally purchased from third parties by the Counterparty Central Banks and are recorded in their Securities Custody Accounts (S).

1. (1) Coupon-bearing Japanese government bonds with original maturities of 2, 4, 5, 6, 10, and 20 years; and
2. (2) Japanese treasury discount bills.

3. Purchase Amount

The amount of JGSs to be purchased by the BOJ shall be, in principle, the amount requested by the Counterparty Central Banks.

However, the BOJ shall reserve the right to decline the requested Purchases in whole or in part, if such Purchases give or may give rise to issues concerning the BOJ's money market operations and/or other matters.

4. Resale Conditions

When requested by the Counterparty Central Banks to purchase JGSs under resale agreements, the resale date shall, in principle, be the seventh day from, but excluding, the purchase date.

5. Purchase and Resale Prices

Purchase and resale prices shall be determined in accordance with the relevant procedures provided by the BOJ.

6. Coupon Payments

When the coupon payments from the JGSs purchased by the BOJ under the resale agreements become due before the resale date, equivalent amounts to the coupon payments shall be credited to the relevant yen account of the Counterparty Central Banks (hereinafter the "Yen Account").

7. Service Costs

No commissions shall be charged in relation to the services provided by the BOJ under these Principal Terms and Conditions.

All out-of-pocket expenses, excluding charges for communications between the Counterparty Central Banks and the BOJ, shall be debited to the relevant Yen Account of the Counterparty Central Banks.

8. Termination of Agreements

Both the Counterparty Central Banks and the BOJ shall be entitled to terminate their Agreements at any time, upon giving notice to such effect.

9. Governing Law

These Principal Terms and Conditions shall be governed by and construed in accordance with the laws of Japan.