BoJ cuts collateral values for long JGBs and loans from 27 November

Victoria Shinder10 October 2026, 10:012 min read

The Bank of Japan published on 9 October an amendment to its "Prices of Eligible Collateral" and to the margin ratios for its JGB repo operations. The changes take effect on 27 November 2026. The Bank describes them as the outcome of a regular review of collateral prices and margins "in light of recent financial market developments", aimed at keeping its assets sound while keeping collateral use efficient.

What changes for government bonds. Short and medium JGBs are untouched — up to 1 year and 1–5 years stay at 99% of market value, 5–10 years at 98%, 10–20 years at 97%. The cut is at the long end:

| residual maturity | before | from 27 November | |---|---|---| | over 20 and up to 30 years | 95% | 94% | | over 30 years | 94% | 93% |

The same one-point cut applies at those maturities to JGB STRIPS, government-guaranteed and municipal bonds, FILP agency bonds, corporate bonds, ABS, J-REIT bonds, foreign government and international institution bonds.

Bigger cuts for loans and electronic claims. The larger changes are for credit collateral valued at outstanding principal. For loans on deeds and electronically recorded monetary claims on companies, collateral value falls from 90% to 88% for 1–3 years, 82% to 77% for 3–5 years, 76% to 69% for 5–7 years and 66% to 57% for 7–10 years. Claims on the government and government-guaranteed claims are cut by similar steps (for 7–10 years, from 76% to 66%). Under the temporary rules for company and municipal debt, self-assessed claims at 7–10 years fall from 35% to 29%. The valuation of housing-loan trust beneficial interests is cut from 59% to 51% of principal.

Repo margins. The margin ratios for JGBs the Bank buys or sells under repurchase agreements are also revised for the longest maturities.

Why it matters. Lower collateral prices mean banks must pledge more securities or loans to borrow the same amount from the Bank of Japan. The pattern — no change at the short end, cuts concentrated in long bonds and long-dated loans — is what a central bank does when it judges price volatility at long maturities to be higher than it was when the haircuts were last set. For banks that lean on loan collateral for BoJ funding, the 5–10 year loan buckets lose the most value; the changes are worth checking against collateral pools before late November.

Source: Bank of Japan, "Amendment to 'Prices of Eligible Collateral'", 9 October 2026 — https://www.boj.or.jp/en/mopo/mpmdeci/mpr_2026/mpr261009a.pdf