The Bank of Japan is to issue a new tranche of Yen 100 billion of ten year index-linked JGBs from March 2004. The bonds will be available in book-entry (Furiketsu) form only. Interest will be paid bi-annually, and both coupons and principal will be linked to the monthly consumer price index.
“From an operational standpoint the new CPI Index-linked JGB can be safe-kept in existing interest bearing book-entry accounts, as the existing JGB rules are applicable and no current transfer restrictions are being considered,” says a spokesman for the custody department at Mizuho Corporate Bank in Tokyo. “However, system enhancements may be required in order to compute JGB interest and redemption calculations.”