TITLE: Bank of Japan Relaxes Securities Lending Facility Terms for Ten-Year Japanese Government Bonds
BODY:
On February 27, 2026, the Bank of Japan's Financial Markets Department announced changes to the terms and conditions of its Securities Lending Facility (SLF) for cheapest-to-deliver (CTD) issues.
Effective March 2, 2026, the Bank of Japan will apply regular conditions to new transactions for 10-year Japanese Government Bonds (JGBs) #370. This issue had been subject to relaxed conditions since December 1, 2025, under which the upper limit for consecutive-day purchases was increased to a maximum of 75 business days. Under regular conditions, this limit will revert to a maximum of 50 business days, in principle. The relaxed conditions were implemented to ensure stability in the Japanese government securities repo market by easing excessive tightening in supply and demand. The Bank of Japan noted that the amount outstanding in the market for each issue applicable to relaxed conditions has reached the upper limit on reduction of 1.5 trillion yen, as outlined in the Bank's June 17, 2025 announcement regarding reduction in repurchase amounts under the SLF. Additionally, since January 2026, 10-year JGBs #362 has been removed from the list of issues applicable to relaxed conditions.
Going forward, the Bank of Japan will apply regular conditions to CTD issues and will continue to closely monitor the situation of sales, purchases, and lending of CTD issues in the JGB cash and repo markets. For further information, market participants may contact the Market Operations Division, Financial Markets Department at post.fmd26@boj.or.jp.