Japan International Cooperation Agency 424B5 Prospectus supplement for primary offering

Filed pursuant to Rule 424(b)(5)
Registration Number 333-268943

PROSPECTUS SUPPLEMENT TO SEC BASE PROSPECTUS DATED

March 7, 2023

LOGO

Japan International Cooperation Agency

(An incorporated administrative agency)

U.S.$1,250,000,000 4.000% Guaranteed Bonds Due May 23, 2028

Unconditionally and Irrevocably Guaranteed

as to Payment of Principal and Interest by

Japan

We will pay interest semi-annually in arrears in equal payments on the $1,250,000,000 4.000% guaranteed bonds due May 23, 2028 (the “bonds”) on May 23 and November 23 of each year, commencing November 23, 2023. The bonds will mature on May 23, 2028. We may redeem all, but not less than all, of the bonds in the event of certain tax law changes. The redemption terms are described in this prospectus supplement dated May 16, 2023 (this “Supplement”) under “Description of the Bonds and Guarantee—Redemption”. The bonds will be issued only in registered form in denominations of $200,000 and integral multiples of $2,000 in excess thereof. See “Description of the Bonds and Guarantee”.

We intend to use the net proceeds from the sale of the bonds to finance newly committed or ongoing Eligible Projects of Sustainability Bonds as defined under our Social/Sustainability Bond Framework (the “Framework”). See “Use of Proceeds.”

Approval in principle has been received for the listing and quotation of the bonds on the Singapore Exchange Securities Trading Limited (the “SGX-ST”). The SGX-ST assumes no responsibility for the correctness of any of the statements made or opinions or reports contained in this Supplement and the accompanying prospectus dated March 7, 2023 starting after page S-77 (the “SEC Base Prospectus”). Admission of the bonds to the official list of the SGX-ST and quotation of the bonds on the SGX-ST are not to be taken as an indication of the merits of JICA, Japan, the bonds or the guarantee.

Neither the United States Securities and Exchange Commission (the “Commission”) nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this Supplement or the SEC Base Prospectus. Any representation to the contrary is a criminal offense.

Prospective investors should consider carefully the factors described under the section headed “Risk Factors” in this Supplement.


	Per Bond		Total
Price to Public⁽¹⁾		99.628%		$1,245,350,000
Underwriting Discount		0.125%		$1,562,500
Proceeds, before expenses, to JICA⁽¹⁾⁽²⁾		99.503%		$1,243,787,500

(1)	Plus accrued interest, if any, from May 23, 2023, if settlement occurs after that date.

(2)	See “Underwriting”.

The underwriters are offering the bonds subject to various conditions. The underwriters expect to deliver the bonds through the book-entry facilities of The Depository Trust Company (“DTC”), Euroclear Bank SA/NV (“Euroclear”) and Clearstream Banking S.A. (“Clearstream”), against payment on or about May 23, 2023.


Daiwa Capital Markets Europe		Barclays		Citigroup		Morgan Stanley

Prospectus Supplement dated May 16, 2023.

TABLE OF CONTENTS

Supplement


	Page
FOREIGN EXCHANGE CONSIDERATIONS		S-6
INCORPORATION BY REFERENCE		S-7
INTRODUCTION		S-8
RISK FACTORS		S-11
RECENT DEVELOPMENTS		S-16
USE OF PROCEEDS		S-56
DESCRIPTION OF THE BONDS AND GUARANTEE		S-60
GLOBAL CLEARANCE AND SETTLEMENT		S-67
TAXATION		S-70
UNDERWRITING		S-71
VALIDITY OF SECURITIES		S-75
AUTHORIZED AGENTS IN THE UNITED STATES		S-75
EXPERTS		S-75
GENERAL INFORMATION		S-76

SEC Base Prospectus


	Page
ABOUT THIS PROSPECTUS		iii
FORWARD-LOOKING STATEMENTS		iii
WHERE YOU CAN FIND MORE INFORMATION		1
JAPAN INTERNATIONAL COOPERATION AGENCY		2
JAPAN		6
USE OF PROCEEDS		51
DESCRIPTION OF THE DEBT SECURITIES AND GUARANTEE		52
TAXATION		55
PLAN OF DISTRIBUTION		61
AUTHORIZED AGENTS IN THE UNITED STATES		61
VALIDITY OF THE DEBT SECURITIES		61
EXPERTS		62
FURTHER INFORMATION		62

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The bonds have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended) and the bonds are subject to the Act on Special Measures Concerning Taxation of Japan (Act No. 26 of 1957, as amended). The bonds may not be offered or sold in Japan or to, or for the benefit of, residents of Japan or Japanese corporations, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act of Japan and any other applicable laws, regulations and ministerial guidelines of Japan (see “Underwriting” below). The bonds are not, as part of the initial distribution at any time, to be offered or sold to, or for the benefit of, any person other than a beneficial owner that is, (i) for Japanese tax purposes, neither (x) an individual resident of Japan or a Japanese corporation, nor (y) an individual non-resident of Japan or a non-Japanese corporation that in either case is a person having a special relationship with JICA (that is, in general terms, a person who directly or indirectly controls or is directly or indirectly controlled by, or is under direct or indirect common control with, JICA) as described in Article 6, Paragraph (4) of the Act on Special Measures Concerning Taxation of Japan (a “Specially-Related Party of JICA”) or (ii) a Japanese financial institution, designated in Article 6, Paragraph (11) of the Act on Special Measures Concerning Taxation of Japan. BY SUBSCRIBING FOR THE BONDS, AN INVESTOR WILL BE DEEMED TO HAVE REPRESENTED IT IS A PERSON WHO FALLS INTO THE CATEGORY OF (i) OR (ii) ABOVE.

In addition, interest payments on the bonds will generally be subject to Japanese withholding tax unless it is established that bonds are held by or for the account of a beneficial owner that is (i) for Japanese tax purposes, neither (x) an individual resident of Japan or a Japanese corporation, nor (y) an individual non-resident of Japan or a non-Japanese corporation that in either case is a Specially-Related Party of JICA, (ii) a designated Japanese financial institution described in Article 6, Paragraph (11) of the Act on Special Measures Concerning Taxation of Japan which complies with the requirement for tax exemption under that paragraph, or (iii) a public corporation, a financial institution or a financial instruments business operator, etc. described in Article 3-3, Paragraph (6) of the Act on Special Measures Concerning Taxation of Japan which complies with the requirement for tax exemption under that paragraph.

You should rely only on the information contained or incorporated by reference in this Supplement and the SEC Base Prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in or incorporated by reference in this Supplement or the SEC Base Prospectus is accurate as of any date other than the date on the front page of this Supplement or, with respect to information incorporated by reference, as of the date of such information.

In this Supplement, “we”, “our”, “us” and “JICA” refer to Japan International Cooperation Agency.

The spot buying rate for U.S. dollars quoted on the Tokyo foreign exchange market on May 15, 2023, as reported by the Bank of Japan at 5:00 p.m., Tokyo time, was ¥135.96 = $1.00, and the noon buying rate on May 12, 2023 for cable transfers in New York City payable in yen, as reported by the Federal Reserve Bank of New York, was $1.00 = ¥135.63.

References in this Supplement to Japanese fiscal years (“JFYs”) are to 12-month periods commencing in each case on April 1 of the year indicated and ending on March 31 of the following year. References to years not specified as being JFYs are to calendar years. References to “¥”or “yen” are to Japanese yen and references to “$” are to U.S. dollars.

Pursuant to Japanese government directions regarding the presentation of Japanese names in English in official documents, in this Supplement Japanese family names are presented first (in capital letters) and given names second. With respect to Japanese names in documents incorporated by reference into this Supplement, the name order is reverse.

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The distribution of this Supplement and the SEC Base Prospectus and the offering of the bonds in certain jurisdictions may be restricted by law.

The bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (the “EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); (ii) a customer within the meaning of Directive (EU) 2016/97 (the “IDD”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129 (the “Prospectus Regulation”). Consequently no key information document required by Regulation (EU) No 1286/2014 (the “PRIIPs Regulation”) for offering or selling the bonds or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the bonds or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

The bonds are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the United Kingdom. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (8) of Article 2 of Regulation (EU) No 2017/565, as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (“EUWA”); (ii) a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (“the FSMA”) and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014, as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129, as it forms part of domestic law by virtue of the EUWA. Consequently no key information document required by Regulation (EU) No 1286/2014, as it forms part of domestic law by virtue of the EUWA (the “UK PRIIPs Regulation”) for offering or selling the bonds or otherwise making them available to retail investors in the United Kingdom has been prepared and therefore offering or selling the bonds or otherwise making them available to any retail investor in the United Kingdom may be unlawful under the UK PRIIPs Regulation.

This Supplement and the SEC Base Prospectus do not constitute, and may not be used in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. See “Underwriting”.

Neither JICA, Japan nor the underwriters have authorized, nor do they authorize, the making of any offer of the bonds in circumstances in which an obligation arises for JICA or the underwriters to publish a prospectus or supplement a prospectus for such offer. JICA and Japan have not authorized and do not authorize the making of any offer of the bonds through any financial intermediary, other than offers made by the underwriters resulting in sales constituting the final placement of the bonds contemplated in this Supplement and the SEC Base Prospectus.

Solely for the purposes of the product approval process of each person that is a manufacturer for the purposes of the Product Intervention and Product Governance Sourcebook part of the UK FCA’s Handbook, (the “UK Product Governance Rules”), the target market assessment in respect of the bonds has led to the conclusion that: (i) the target market for the bonds is only eligible counterparties, as defined in the Conduct of Business Sourcebook part of the UK FCA’s Handbook, and professional clients, as defined in Regulation (EU) No 600/2014, as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018; and (ii) all channels for distribution of the bonds to eligible counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending the bonds, or a distributor, should take into consideration the manufacturers’ target market assessment; however, a distributor subject to the UK Product Governance Rules is responsible for undertaking its own target market assessment in respect of the bonds (by either adopting or refining the manufacturers’ target market assessment) and determining appropriate distribution channels.

S-4

IN THE UNITED KINGDOM, THIS SUPPLEMENT AND THE SEC BASE PROSPECTUS ARE FOR DISTRIBUTION ONLY TO PERSONS WHO (I) ARE INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE “ORDER”) OR (II) ARE HIGH NET WORTH COMPANIES AND OTHER PERSONS TO WHOM IT MAY BE LAWFULLY COMMUNICATED, FALLING WITHIN ARTICLE 49(2)(A)-(D) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). IN THE UNITED KINGDOM, THIS SUPPLEMENT AND THE SEC BASE PROSPECTUS AND ANY OF THEIR CONTENTS ARE DIRECTED ONLY AT RELEVANT PERSONS AND MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. IN THE UNITED KINGDOM, ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS SUPPLEMENT AND THE SEC BASE PROSPECTUS RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. ANY PERSON WHO IS NOT A RELEVANT PERSON SHOULD NOT ACT OR RELY ON THIS SUPPLEMENT OR THE SEC BASE PROSPECTUS OR ANY OF ITS CONTENTS.

IN CONNECTION WITH THE ISSUE OF THE BONDS, CITIGROUP GLOBAL MARKETS LIMITED (THE “STABILIZING MANAGER”) (OR ANY PERSONS ACTING ON BEHALF OF THE STABILIZING MANAGER) MAY OVER- ALLOT THE BONDS OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE BONDS AT A LEVEL HIGHER THAN THAT WHICH MAY OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILIZING MANAGER (OR PERSONS ACTING ON BEHALF OF THE STABILIZING MANAGER) WILL UNDERTAKE STABILIZATION ACTION. ANY STABILIZATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE BONDS IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE BONDS AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE BONDS. ANY STABILIZATION ACTION OR OVER-ALLOTMENT MUST BE CONDUCTED BY THE RELEVANT STABILIZING MANAGER (OR PERSONS ACTING ON BEHALF OF THE RELEVANT STABILIZING MANAGER) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.

S-5

FOREIGN EXCHANGE CONSIDERATIONS

For an investor that is not resident in the United States or does not conduct business or activities in the United States, an investment in the bonds, which are denominated in, and all payments in respect of which are to be made in, U.S. dollars entails significant risks not associated with a similar investment in a security denominated in the investor’s home currency (i.e., the currency of the country in which the investor is resident or the currency in which the investor conducts its business or activities). These include the possibility of:

•

significant changes in rates of exchange between the home currency and the U.S. dollar; and

•

the imposition or modification of foreign exchange controls with respect to the U.S. dollar.

We have no control over a number of factors affecting this type of bond, including economic, financial and political events that are important in determining the existence, magnitude and longevity of these risks and their results. In recent years, rates of exchange for certain currencies, including the U.S. dollar, have been volatile and this volatility may be expected to continue in the future. Fluctuations in any particular exchange rate that have occurred in the past are not necessarily indicative of fluctuations in the rate that may occur during the term of the bonds. Depreciations of the U.S. dollar against the investor’s home currency could result in a decrease in the investor’s effective yield of the bonds below the coupon rate, and in certain circumstances, could result in a loss to such purchaser on a home currency basis.

The description of foreign currency risks does not describe all the risks of an investment in securities denominated in a currency other than your home currency. Prospective investors should consult their own financial and legal advisors as to the risks involved in an investment in such bonds.

S-6

INCORPORATION BY REFERENCE

Japan’s Annual Report on Form 18-K for the year ended March 31, 2022 (the “Japan 18-K 2022”), JICA’s Annual Report on Form 18-K for the year ended March 31, 2022 (the “JICA 18-K 2022”) and Exhibit 2 to JICA’s Annual Report on Form 18-K for the year ended March 31, 2021 (the “JICA 18-K 2021”) are hereby incorporated by reference and form part of this Supplement.

Any statement contained in a document which is incorporated by reference in this Supplement or the SEC Base Prospectus shall be deemed to be modified or superseded for the purpose of this Supplement to the extent that a statement contained herein or another document incorporated by reference herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Supplement. Copies of the documents incorporated by reference in this Supplement or the SEC Base Prospectus are available free of charge at the office of the fiscal agent in London.

The JICA 18-K 2022 contains the following audited financial statements, prepared in accordance with accounting principles generally accepted in Japan (“Japanese GAAP”), beginning on page F-1 of Exhibit 2 to the JICA 18-K 2022:

•

the annual audited balance sheet as at March 31, 2022, the related audited statements of administrative service operation cost, income, changes in net assets and cash flows for the fiscal year ended March 31, 2022, and the significant accounting policies, notes and detailed statements relating thereto, all in respect of the General Account of JICA; and

•

Exhibit 2 to the JICA 18-K 2021 contains the following audited financial statements, prepared in accordance with Japanese GAAP, beginning on page F-1 of Exhibit 2 to JICA 18-K 2021:

•

the annual audited balance sheet as at March 31, 2021, the related audited statements of administrative service operation cost, income, changes in net assets and cash flows for the fiscal year ended March 31, 2021 and the significant accounting policies, notes and detailed statements relating thereto, all in respect of the General Account of JICA; and

•

S-7

INTRODUCTION

The following is an abstract of certain information contained elsewhere in this Supplement or the SEC Base Prospectus or incorporated by reference herein. More detailed information is contained elsewhere in this Supplement or the SEC Base Prospectus or incorporated by reference herein. You should read carefully this entire Supplement, the SEC Base Prospectus and the other documents we refer to for a complete understanding of this offering.

Issuer

Japan International Cooperation Agency.

Issue Date

The issue date is May 23, 2023.

Securities Offered

$1,250,000,000 principal amount of 4.000% Guaranteed Bonds Due May 23, 2028

Guarantee

Payments of principal of and interest on the bonds are unconditionally and irrevocably guaranteed by Japan.

Maturity Date

May 23, 2028

Interest Payment Dates

Semi-annually on May 23 and November 23 of each year, commencing November 23, 2023.

Interest Rate

The bonds will bear interest at a rate of 4.000% per annum, accruing from May 23, 2023. We will pay interest on the bonds semi-annually in arrears in equal payments. Whenever it is necessary to compute any amount of interest in respect of the bonds, that interest will be calculated on the basis of a 360-day year of twelve 30-day months.

Ranking

The bonds will be our direct, unsecured debt securities obligations and rank pari passu and be payable without any preference among themselves and at least equally with all of our other unsecured debt securities obligations from time to time outstanding, which rank senior to our unsecured general obligations not represented by debt securities, provided, however, that certain obligations in respect of national and local taxes and certain preferential rights granted by, among others, the Japanese Civil Code to certain specified types of creditors, such as preferential rights of employees to wages, will have preference.

Additional Amounts

If certain taxes, as described under “Description of the Bonds and Guarantee”, are payable on the bonds, we will, subject to certain exceptions, pay such additional amounts on the bonds as will result, after deduction or withholding of such taxes, in the payment of the amounts that would have been payable on the bonds if no such deduction or withholding had been required. For further detail on the payment of these additional amounts, see “Description of the Bonds and Guarantee—Additional Amounts”.

Redemption

We may redeem all, but not less than all, of the bonds in the event of certain changes relating to Japanese taxation at 100% of the principal amount thereof plus accrued interest thereon and any additional amounts we are required to pay, as described under “Description of the Bonds and Guarantee—Redemption”.

Markets

We are offering the bonds for sale only in those jurisdictions other than Japan (subject to certain exceptions) where it is legal to make such offers. See “Underwriting” for a description of applicable selling restrictions.

S-8

Listing

Approval in principle has been received for the listing and quotation of the bonds on the SGX-ST. The bonds will be traded on the SGX-ST in a minimum board lot size of $200,000 for so long as such bonds are listed on the SGX-ST and the rules of the SGX-ST so provide.

Form and Settlement

All bonds will be in registered form, without interest coupons attached. Bonds held outside the United States, referred to as the international bonds, will be represented by beneficial interests in the international global bond, which will be registered in the name of the nominee of the common depositary for, and in respect of interests held through, Euroclear and Clearstream. Bonds held within the United States, referred to as the DTC bonds, will be represented by beneficial interests in one or more DTC global bonds, which will be registered in the name of Cede & Co., as the nominee of DTC. Except as described in this Supplement, beneficial interests in the global bonds will be represented through book-entry accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants in DTC, Euroclear and Clearstream, and owners of beneficial interests in the global bonds will not be entitled to have bonds registered in their names, will not receive or be entitled to receive bonds in definitive form and will not be considered holders of bonds under the fiscal agency agreement relating to the bonds. The bonds will be sold only in denominations of $200,000 and integral multiples of $2,000 in excess thereof. For further information on book-entry procedures, see “Description of the Bonds and Guarantee—Form, Denominations and Registration”.

Investors electing to hold their bonds through DTC will follow the settlement practices applicable to U.S. corporate debt obligations. The securities custody accounts of investors will be credited with their holdings against payment in same-day funds on the settlement date.

Investors electing to hold their bonds through Euroclear or Clearstream accounts will follow the settlement procedures applicable to conventional eurobonds in registered form. Bonds will be credited to the securities custody accounts of Euroclear holders and of Clearstream holders against payment in same-day funds on the settlement date. For information on secondary market trading, see “Global Clearance and Settlement—Secondary Market Trading”.

Use of Proceeds

We intend to use the net proceeds from the sale of the bonds to finance newly committed or ongoing Eligible Projects of Sustainability Bonds as defined under the Framework. See “Use of Proceeds.”

Fiscal Agent, Principal Paying Agent and Transfer Agent

MUFG Bank, Ltd., London Branch, also acting through U.S. Bank Trust Company, National Association

Common code

262493890 (DTC global bond); 262461009 (international global bond)

CUSIP

47109L AG9

ISIN

US47109LAG95 (DTC global bond); XS2624610098 (international global bond)

S-9

Risk Factors

Your investment in the bonds will involve risks. You should consider carefully the factors described under the section headed “Risk Factors” in this Supplement and the other information in this Supplement, the SEC Base Prospectus and the documents incorporated herein or therein before deciding whether an investment in the bonds is suitable for you.

S-10

RISK FACTORS

We believe that the following factors may affect our ability to fulfil our obligations under our bonds. All of these factors are contingencies which may or may not occur and we are not in a position to express a view on the likelihood of any such contingency occurring.

Factors which we believe may be material for the purpose of assessing the market risks associated with our bonds are also described below.

We believe that the factors described below represent the principal risks inherent in investing in our bonds. Prospective investors should carefully consider these factors in conjunction with the detailed information set out elsewhere in this Supplement and the SEC Base Prospectus (including any documents or information incorporated by reference herein), and reach their own views prior to making any investment decision.

Risks Relating to the Japanese Economy in General

Prospective investors in our bonds should be aware of the challenges faced by the Japanese economy. The Japanese economy continues to face challenges due to uncertainty about the economic prospects of the world economy.

Global economic conditions have been significantly impacted due to extensive disruptions in economic activity and volatility in financial markets caused by the global COVID-19 pandemic since December 2019, and the measures implemented in many countries to help contain the spread of the disease. Although such preventative measures have been largely relaxed, the future economic impact of COVID-19 remains uncertain, and any such impact could differ significantly in terms of severity and duration depending on the country.

The global economy has also recently been impacted by Russia’s large-scale military activity against Ukraine that was initiated in February 2022 and the related economic sanctions imposed on certain Russian entities and persons by many major countries. In particular, financial and commodity markets have experienced significant volatility and energy prices have sharply increased mainly due to concerns regarding disruptions in oil and natural gas supply. Driven in part by increases in energy prices as well as increases in raw materials prices, there has been a significant inflationary trend in consumer prices in many major economies including Japan, and monetary authorities in some major economies have been tightening monetary policy in response to this trend. Depending on how the conflict develops and any additional economic sanctions imposed on Russia, as well as the impact of inflation and monetary policy developments, economic conditions in Japan and globally may continue to worsen, and the duration and extent of any economic slowdown is highly uncertain.

Although the Japanese government and the Bank of Japan (“BOJ”) are pursuing expansive economic measures, including monetary easing measures implemented by the BOJ, such as the continuation of the BOJ’s negative interest rate policy and framework for quantitative and qualitative monetary easing first introduced in 2016, the effect of such measures remains unclear, and such measures could be modified in the future. In addition, increased spending for economic stimulus measures could negatively impact Japan’s fiscal condition due to higher levels of public debt. Partially in response to the planned increase in public spending in Japan, in June 2020, S&P Global Ratings lowered its outlook on Japan’s sovereign credit rating from positive to stable. In addition, in July 2020, Fitch Ratings lowered its outlook on Japan’s sovereign credit rating from stable to negative, although Fitch Ratings subsequently changed its outlook to stable in March 2022. Further challenges for the Japanese economy include volatile exchange rates, supply chain constraints and, over the long term, demographic challenges, such as an aging workforce and population decrease, and high levels of public debt and associated debt servicing payments. Further slowdowns in overseas economies, recent instability and liquidity concerns in the banking sector and sharp fluctuations in the financial and capital markets also pose downside risks to the Japanese economy. In addition, the Japanese economy is also exposed to challenges due to long-term deflation as well as the potential impact of ongoing political disputes, technology and trade tensions between the

S-11

United States and China and other major trading partners as well as the potential escalation of geopolitical risks associated the Middle East or North Korea.

Risks Relating to JICA

As a government-affiliated financial institution established to implement the ODA policies of the Japanese government, JICA’s business and financial condition may be adversely affected by the policies of the Japanese government.

In particular, JICA has undergone significant transformations in its history, first through the re-establishment of JICA from a special public institution into an incorporated administrative agency in October 2003 pursuant to the Act of the Incorporated Administrative Agency—Japan International Cooperation Agency (the “JICA Act”) and then through various changes following the enactment of the Act for Partial Amendments to the Act of the Incorporated Administrative Agency—Japan International Cooperation Agency, which amended the JICA Act. Pursuant to such amendment, inter alia, Finance and Investment operations previously managed by Japan Bank for International Cooperation, a government-affiliated financial institution of Japan, and a portion of Grant Aid (see “Japan International Cooperation Agency—Operations” in the JICA 18-K 2022) provided by the Ministry of Foreign Affairs of Japan (“MOFA”) were succeeded by JICA. Any further reforms to the operational scope and organizational structure of JICA, whether through amendment of the laws and regulations underpinning JICA’s existence or otherwise, may have a material effect on the operations of JICA.

JICA’s business and financial condition may be negatively affected by the continued impact of the COVID-19 pandemic as well as Russia’s large-scale military activity against Ukraine and the resulting impact on governments and/or government agencies to whom JICA implements the Japanese ODA schemes (see “Recent Developments—JICA—Overview” below) and general economic conditions and financial markets. In addition, since the economic recovery from COVID-19 and the impact of Russia’s military activity against Ukraine is expected to remain highly uncertain worldwide, JICA may need to increase the allowance for loan losses and provision for contingent losses in subsequent fiscal years if, for example, debtors’ credit ratings deteriorate beyond JICA’s current expectations over the medium to long term.

With respect to related responses to the COVID-19 pandemic, in March 2020, the World Bank and the International Monetary Fund (IMF) published a letter requesting a temporary suspension of debt service payments to be made by some developing countries, named the Debt Service Suspension Initiative (DSSI), with the aim of fulfilling their liquidity needs. The DSSI was adopted at the G20 Finance Ministers and Central Bank Governors Meeting, and the Paris Club, an international group focusing on debt, in April 2020. It was agreed to extend the grace period for debt payments under the DSSI for six months until the end of June 2021, and to implement debt restructuring measures on a case-by-case basis as needed at the meeting of the G20 Finance Ministers and Central Bank Governors in October 2020 and an additional special meeting in November 2020. Furthermore, in April 2021, the G20 Finance Ministers and Central Bank Governors agreed to its further extension by six months until the end of December 2021. Implementing the suspension based on the DSSI has already had an adverse impact on JICA’s interest income and other revenues. Furthermore, under the Common Framework for Debt Treatments beyond the DSSI that the G20 agreed to in November 2020, debtors in low-income countries in particular may benefit from additional debt restructuring measures, which could require JICA to increase the allowance for loan losses and the provision for contingent losses. These increases in turn may have an adverse impact on JICA’s profit and loss and financial condition.

Risks Relating to the Market Risk of Bonds Generally

Interest rate risk

Investment in the bonds involves the risk that subsequent changes in market interest rates may adversely affect the value of the bonds.

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Exchange rate risk

Prospective investors in the bonds should be aware that an investment in the bonds may involve exchange rate risks. The bonds may be denominated in a currency other than the currency of the investor’s home jurisdiction and/or in a currency other than the currency in which an investor wishes to receive funds. Exchange rates between currencies are determined by factors of supply and demand in the international currency markets which are influenced by macroeconomic factors, speculation and central bank and government intervention (including the imposition of currency controls and restrictions). Fluctuations in exchange rates may affect the value of the bonds. See “Foreign Exchange Considerations”.

The secondary market generally

The bonds may have no established trading market when issued, and one may never develop. If a market does develop, it may not be sufficiently liquid. Therefore, investors may not be able to sell their bonds easily or at prices that will provide them with a yield comparable to similar investments that have a developed secondary market. Although Approval in principle has been received for the listing and quotation of the bonds on the SGX-ST, there is also no assurance that an active trading market will develop. Illiquidity may have a severely adverse effect on the market value of the bonds.

Risks Relating to our Bonds

The bonds may not be suitable for all investors

Each potential investor in the bonds must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:

•

have sufficient knowledge and experience to make a meaningful evaluation of the bonds and the guarantee, the merits and risks of investing in the bonds and the information contained in this Supplement and the SEC Base Prospectus;

•

have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the bonds and the impact such investment will have on its overall investment portfolio;

•

have sufficient financial resources and liquidity to bear all of the risks pertaining to an investment in the bonds;

•

thoroughly understand the terms and conditions of the bonds as summarized in “Description of the Bonds and Guarantee” and be familiar with the behavior of any relevant markets; and

•

be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors including those set forth in this “Risk Factors” section that may affect its investment and its ability to bear the applicable risks.

Limited liquidity

The fact that the bonds may be listed does not necessarily assure liquidity. No assurance can be given that there will be a market for the bonds. If the bonds are not traded on any securities exchange, pricing information for such bonds may be more difficult to obtain, and the liquidity and market prices of such bonds may be adversely affected. The liquidity of the bonds may also be affected by restrictions on offers and sales of the bonds in some jurisdictions. The underwriters may from time to time make a market in the bonds but are under no obligation to do so and, if a market does develop, it may not continue until the maturity of all the bonds.

Bonds subject to optional redemption by JICA

Redemption of the bonds in circumstances of changes in applicable laws or treaties may limit their market value. During any period when JICA may elect to redeem the bonds, the market value of the bonds generally will not rise substantially above the price at which they can be redeemed.

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Legal investment considerations may restrict certain investments

The investment activities of certain investors are subject to investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its own legal advisers to determine whether, and to what extent (i) the bonds are legal investments for it, (ii) the bonds can be used as collateral for various types of borrowing and (iii) other restrictions may apply to its purchase or pledge of the bonds. In addition, financial institutions should consult their own legal advisers or the appropriate regulators to determine the appropriate treatment of the bonds under any applicable risk-based capital or similar rules.

Credit rating of the bonds may not reflect all risks and may be downgraded

It is expected that the bonds will be assigned a credit rating by a credit rating agency. The rating assigned to the bonds may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the bonds. A downgrade or potential downgrade in the rating or the assignment of new rating that is lower than the existing rating could reduce the number of potential investors in the bonds and adversely affect the price and liquidity of the bonds. A credit rating is based upon information furnished by JICA or obtained by the rating agency from its own sources and is subject to revisions, suspension or withdrawal by the rating agency at any time. A credit rating is not a recommendation to buy, sell or hold securities. Any adverse change in an applicable credit rating could affect the trading price for the bonds.

Net proceeds from the sale of the bonds may be inadvertently allocated by JICA to projects other than Eligible Projects under the Framework and the use of proceeds of the bonds may not be suitable for each investor’s specific investment criteria

JICA intends to allocate the amount equivalent to the net proceeds from the sale of the bonds to Eligible Projects as defined under the Framework, which is composed of projects which contribute to resolving social issues and projects which contribute to resolving both social and environmental issues. See “Use of Proceeds”. Each prospective investor should consider the information set out in this prospectus supplement regarding such use of proceeds and must determine for themselves the relevance of such information for the purpose of any investment in the bonds together with any other investigation such investor deems necessary. JICA has significant flexibility in allocating the net proceeds from the sale of the bonds, including re-allocating the net proceeds in the event JICA determines, in JICA’s discretion, that projects receiving allocation no longer meet the eligibility criteria for Eligible Projects. JICA may also be unable to allocate the net proceeds as JICA intended. Although JICA intends not to allocate the net proceeds from the sale of the bonds to projects that meet certain exclusionary criteria set forth in the Framework, JICA’s determination of the projects to which JICA is able to allocate the net proceeds is based on JICA’s own interpretation of the Framework, and there is no assurance that investors will agree with JICA’s interpretation.

Prior to the offering of the bonds, JICA has concluded loan agreements that provide financing to projects that would fall within the exclusionary criteria set forth in the Framework, including projects relating to the development of coal fired thermal power plants. The funds provided under such agreements relating to projects that are not Eligible Projects are disbursed from JICA’s Finance and Investment Account. In addition, certain organizations have made claims criticizing JICA and other agencies of the Japanese government for supporting coal fired thermal power plants related activities, and any such future claims may adversely impact JICA’s reputation.

The net proceeds of the bonds will be deposited to the Finance and Investment Account in accordance with the JICA Act and will not be managed in a separate account. However, JICA will actively manage and track the net proceeds to ensure that they are allocated only to finance Eligible Projects from the Finance and Investment Account, in accordance with the Framework.

Despite JICA’s efforts to prevent misallocation of the net proceeds of the bonds, JICA may inadvertently allocate such net proceeds, directly or indirectly, to projects that do not qualify as Eligible Projects, including those meeting the exclusionary criteria under the Framework. In addition, even if the net proceeds of the bonds are

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allocated to Eligible Projects, JICA’s participation in financing of projects that are not Eligible Projects may be viewed negatively by investors given the increased focus of some investors on social and environmental matters.

JICA may also, in JICA’s discretion update or amend the Framework from time to time, which gives JICA further flexibility with respect to both the allocation of the net proceeds from the sale of the bonds as well as the reporting about such allocation or the social and environmental impact of the Eligible Projects to which such net proceeds may be allocated. There can be no assurance that such use of proceeds for any Eligible Projects will satisfy, whether in whole or in part, any present or future investor expectations or requirements, taxonomies or standards or other investment criteria or guidelines with which such investor or its investments are required to comply, whether by any present or future applicable law or regulations or by its own bylaws or other governing rules or investment portfolio mandates, ratings criteria, taxonomies or standards or other independent expectations, in particular with regard to any direct or indirect social and environmental impact of any Eligible Projects. Furthermore, there is currently no clear definition (legal, regulatory or otherwise) of, nor market consensus as to which precise attributes are required for a particular project to be defined as either “social” or “sustainable”, and therefore no assurance can be provided to potential investors that the use of proceeds specified in this prospectus supplement will meet an investor’s expectations regarding social and environmental performance or continue to meet the relevant eligibility criteria.

A second-party opinion from Moody’s Investors Service, regarding the Framework has been made publicly available. No assurance or representation is given as to the suitability or reliability for any purpose whatsoever of any opinion or certification of, or any report concerning any review by, any third party (whether or not solicited by JICA) that will be made available in connection with the issuance of the bonds, in particular as it relates to the ability of an Eligible Project to fulfill any social, environmental or other criteria. No such opinion, certification or report is, nor should it be deemed to be, a recommendation by JICA, any underwriter with respect to the bonds or any other person to buy, sell or hold the bonds. Any such opinion, certification or report is only current as of the date it was initially issued. Prospective investors must determine for themselves the relevance of any such opinion, certification or report, the information contained therein and the provider thereof for the purpose of any investment in the bonds. For the avoidance of doubt, no such opinion, certification or report is, nor shall it be deemed to be, incorporated into this prospectus supplement, the accompanying prospectus or any other filing with the Commission.

In the event that the bonds are listed or admitted to trading on any dedicated “social bonds” or “sustainability bonds” or other similarly labelled segment of any stock exchange or securities market (whether or not regulated), or are included in any dedicated “social bonds” or “sustainability bonds” or other similarly labelled index or indices, no representation or assurance is given by JICA, the underwriters or any other person that such listing or admission, or inclusion in such index or indices, satisfies, whether in whole or in part, any present or future investor expectations or requirements as regards any investment criteria or guidelines with which such investor or its investments are required to comply, whether by any present or future applicable law or regulations or by its own by-laws or other governing rules or investment portfolio mandates, in particular with regard to any direct or indirect social and environmental impact of any projects or uses that are the subject of or related to, any Eligible Projects. Furthermore, it should be noted that the criteria for any such listings or admission to trading may vary from one stock exchange or securities market to another and also the criteria for inclusion in such index or indices may vary from one index to another. Nor is any representation or assurance given or made by JICA, the underwriters or any other person that any such listing or admission to trading, or inclusion in any such index or indices, will be obtained in respect of the bonds or, if obtained, that any such listing or admission to trading, or inclusion in such index or indices, will be maintained during the life of the bonds.

Any failure to apply the net proceeds from the sale of the bonds in the manner set out in “Use of Proceeds”, the withdrawal of any opinion, certification or review of any third party with respect to the Framework or any attestation that JICA is not complying in whole or in part with any matters subject to such opinion, certification or review may have a material adverse effect on the value of the bonds or result in adverse consequences for certain investors with portfolio mandates to invest in securities to be used for a particular purpose.

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RECENT DEVELOPMENTS

JICA

Overview

JICA is an incorporated administrative agency established in October 2003 pursuant to the JICA Act. JICA’s main objective is to contribute to the promotion of international cooperation as well as the sound development of the Japanese and global economy by supporting the socioeconomic development, recovery or economic stability of developing regions. JICA is currently the sole implementing agency for all major Japanese Official Development Assistance (“ODA”) schemes and is irreplaceable by the private sector. The major Japanese ODA schemes are separated into three categories—Technical Cooperation, Grant Aid and Finance and Investment.

Mid-Term Objectives and Plan

In accordance with Article 30, Paragraph 1 of the Act on General Rules for Incorporated Administrative Agencies, JICA has established a mid-term plan for achieving its mid-term objectives during the five-year period that commenced on April 1, 2022. Operation focuses for JICA’s mid-term objectives and plans include, among others:

•

addressing key development agendas, such as achieving “quality-growth” and poverty eradication through such growth, sharing universal values and realizing a peaceful and secure society, building a sustainable and resilient international community by addressing global challenges; and

•

realizing the vision of a “Free and Open Indo-Pacific (FOIP)”, human resource development of future leaders of developing countries through “JICA Development Studies Program” and other programs, addressing climate change and environment conservation and contributing to Japan’s socio-economic revitalization and globalization.

Sustainable Development Goals

JICA has been working to contribute to peace, stability and the prosperity of the international community. JICA intends to proactively contribute to achieving the Sustainable Development Goals (SDGs), adopted at the UN summit in 2015, through its leadership.

JICA plans to play a key role in achieving the SDGs, making use of Japan’s own experience in the socio-economic development of Japan and in cooperation for the development of the international community. Specifically, JICA plans to play a key role in achieving goals for zero hunger, health, education, water/sanitation, energy, economic growth, industry/infrastructure, sustainable cities, climate actions and forests/biodiversity.

Financial Soundness

Regarding JICA’s financial soundness, the Japanese government can, if deemed necessary, inject additional capital with the amount specified in the budgets to JICA pursuant to the JICA Act. Finance and Investment Account has maintained net profit in annual profit and loss since JFY 1997 (except for JFY 2002), and retained earnings are retained internally until they accumulate to an amount equivalent to share capital. As of September 30, 2022, government investment by Japan contributed to ¥8,265 billion of net assets on the balance sheet of JICA’s Finance and Investment Account and the capital ratio, calculated as total net assets divided by total assets, was 68.42%.

Response to COVID-19

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negatively impacted future generations by disrupting their opportunities to receive education. Under JICA’s mission to achieve “human security”, JICA has long contributed to efforts for improving healthcare systems in developing countries including measures to combat infectious diseases. In the early twentieth century, Dr. NOGUCHI Hideyo, a Japanese scientist, worked hard to find the major causes of disease transmission. In his name, Ghana established the Noguchi Memorial Institute for Medical Research with Japan’s cooperation, including JICA’s technical support since 1986. This institute has not only conducted 80% of Ghana’s PCR testing to diagnose COVID-19 at the peak of its pandemic, but has also been training laboratory technicians in West Africa.

JICA has been responding to the urgent needs of developing countries under the unprecedented global crisis caused by the COVID-19 pandemic by fully utilizing its human resources and organizational networks, which have been developed over the years of its operations. JICA’s initiatives include provision of cold-chain equipment for transporting vaccines, supporting local production of safe PPE (personal protective equipment) for health workers, provision of water treatment chemicals, raising community awareness for hygiene and sanitation and capacity enhancement for testing and diagnosis. In addition, graduates of JICA’s training program are addressing the COVID-19 pandemic in their assigned countries.

As of March 31, 2023, JICA had extended COVID-19 Crisis Response Emergency Support Loans to 21 countries totaling around 604.8 billion yen in the aggregate, pursuant to which it aims to mitigate the negative social and economic impact of the COVID-19 pandemic by providing budgetary support.

JICA also launched “JICA’s Initiative for Global Health and Medicine” to strengthen its work in protecting people’s lives while supporting Japan’s development policy and international efforts to achieve the pledge of “leaving no one’s health behind.” Under this initiative, JICA will take a holistic approach by focusing on prevention, precaution and treatment, and plans to provide support for infrastructural development by leveraging Japan’s experiences.

Response to Crisis in Ukraine

JICA provides emergency measures, based on the policy of the Japanese government, to Ukraine, which is facing a crisis due to the military invasion. By April 14, 2023, JICA had provided budgetary support of 78 billion yen in the form of “Emergency Economic Recovery Development Policy Loan” to the Ukrainian government. In addition, JICA has also been continuing its support for urgent recovery and reconstruction of destroyed infrastructures through various technical cooperation and a grant aid project. For instance, by technical cooperation, JICA supports the Ukrainian government to enhance capacity for detection and clearance of land mines as well as to preparing master plans on recovery and reconstruction for several cities, where they faced severe damage. By grant aid, a comprehensive package amounting to 76.5 billion yen for urgent recovery is to be provided for Ukraine, including provision of equipment for detection and clearance of mines, machine for clearance of debris of destroyed infrastructure and buildings, public transportation, energy supply, water supply and sanitation, healthcare, education, agriculture and others.

Measures to Address Climate Change

In its sustainability report published in November 2022, JICA outlined the following strategies, measures and policies to address climate change.

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fair and equitable sharing of the benefits arising out of the utilization of genetic resources; the United Nations Convention to Combat Desertification, a legal framework set up to address desertification and the effects of drought; and the Sendai Framework for Disaster Risk Reduction, which provides United Nations Member States with concrete actions to protect development gains from the risk of disaster); associated SDGs; and other related initiatives led by the Japanese government (notably, the Osaka Blue Ocean Vision, through which Japan aims to reduce additional pollution by marine plastic litter and supports developing countries’ efforts in connection with the same).

Specifically, JICA has set forth the following actions as a focus:

•

Promoting implementation of the Paris Agreement by supporting developing partner countries in the planning and implementation of climate change policies and measures, along with the development of greenhouse gas (GHG) inventories and transparency frameworks, as well as by facilitating access to climate finance.

•

Advancing co-benefit climate change solutions that contribute to both addressing development challenges and combating climate change by promoting projects in the following sectors: energy, urban development, transportation, forest and other natural environment conservation, agriculture, environmental management, disaster prevention, water resource management, and healthcare.

JICA has also made efforts to combat climate change, including through sector specific strategies in the energy and agriculture sectors.

With respect to project implementation, JICA emphasizes measures including:

•

Collaboration with various stakeholders;

•

Mobilizing additional finance (via collaboration with the private sector or other funding sources, such as the Green Climate Fund (GCF));

•

Utilizing knowledge and technology from Japan and other countries;

•

Strategic dissemination of information;

•

Inter-city and intra-regional collaboration/cooperation; and

•

Innovation, such as via digital transformation (DX).

JICA identifies and assesses climate risks (hazards, exposures, and vulnerabilities) in its cooperation projects and considers necessary measures at the project formulation stage. Specifically, the “JICA Climate Finance Impact Tool” (JICA Climate-FIT), which is a methodology that aims to grasp the business effects of projects supported by JICA, is used by JICA to assess the climate risk of all of its projects and to examine the possibility of incorporating activities that further strengthen climate change countermeasures, such as mitigation and adaptation. In the project planning stage, JICA may provide assistance through its preparatory surveys, which are undertaken at the preparation stage of a project, either to set a development goal for cooperation and draft suitable cooperation scenarios for attaining such goal or to identify and formulate individual projects and basic plans for such projects. In addition to other procedures related to climate risk, JICA also enhances the climate-related capacity of recipient countries through measures such as improving institutional frameworks, policies and its enforcement capacity through first-hand technical cooperation.

As indicated by the G7 Leaders’ Communiqué from the June 2022 meeting of the Leaders of the Group of Seven (G7), Japan has ended new direct government support for unabated international thermal coal power generation by the end of 2021. In addition, recognizing the importance of national security and geostrategic interests, Japan committed to end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited circumstances clearly defined by each country consistent with a 1.5°C warming limit and the goals of the Paris Agreement.

JICA operates in accordance with such Japanese government policies.

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Budget

The following table sets forth summary budget information in terms of budgeted expenses for the three main arms of operations of JICA for JFY 2021, JFY 2022, and JFY 2023:

Budget for Three Main Arms of Operations


	JFY 2021		JFY 2022		JFY 2023

	(in billions of yen)
Finance and Investment	¥	1,500.0	¥	1,921.0	¥	1,894.0
Technical Cooperation		152.3		173.2		151.9
Grant Aid		163.2		226.9		163.4

Total	¥	1,815.5	¥	2,321.1	¥	2,209.3

Finance and Investment

The following table provides breakdowns of JICA’s Finance and Investment operations in terms of commitment amount by geographical region and sector for JFY 2021:

Finance and Investment

(ODA Loans and PSIF)


	JFY 2021
	(%)
Distribution by Region
Asia		76.6
North and Latin America		8.1
Europe		6.1
Middle East		3.8
Africa		2.8
Pacific		0.8
Others		1.8

Total		100.0

Distribution by Sector
Transportation		49.3
Social Services		19.3
Electric Power and Gas		14.6
Program Loans		8.3
Mining and Industry		2.6
Agriculture, Forestry and Fisheries		0.5
Others		5.4

Total		100.0

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Funding

Finance and Investment operations are funded in accordance with the government of Japan’s ODA commitments and carried out in line with policies implemented by the Japanese Cabinet, and JICA is authorized by statute to borrow from the Japanese government on a long-term basis or issue bonds in order to fund these operations. Over the past five fiscal years, the amount of available funding for JICA’s Finance and Investment operations under JICA’s funding plan has increased, as shown in the following table:

Finance and Investment Account Funding Plan


	JFY 2019		JFY 2020		JFY 2021		JFY 2022		JFY 2023

	(in billions of yen)
Contribution from the government	¥	46.8	¥	51.4	¥	47.0	¥	47.1	¥	47.8
Fiscal Investment and Loan Program (FILP)⁽¹⁾		549.2		820.2		678.4		1,142.7		1,268.6
Borrowing from FILP		485.2		754.2		614.4		1,024.7		1,043.1
Government-guaranteed bonds		64.0		66.0		64.0		118.0		225.5
FILP Agency Bonds⁽²⁾		80.0		80.0		140.0		80.0		80.0
Others		719.0		698.4		634.6		651.2		497.6

Total	¥	1,395.0	¥	1,650.0	¥	1,500.0	¥	1,921.0	¥	1,894.0

Notes:

(1)

See “Japan—Fiscal Investment and Loan Program”.

(2)

Refers to non-government-guaranteed domestic bonds issued pursuant to FILP.

Funding Track Record

Pursuant to JICA’s authority to issue bonds to fund its Finance and Investment operations, JICA has developed a track record of issuing bonds in both domestic and international markets.

Since December 2008, JICA has issued 72 non-government-guaranteed bonds in domestic markets, totaling ¥870 billion. As of the date of this Supplement, the total outstanding amount of such bonds is ¥790 billion. The following table provides JICA’s issuance record of non-government-guaranteed bonds since March 2020:


Bond	Issue Date	Amount		Coupon		Term
		(in billions of yen)		(%)		(years)
52nd	March 19, 2020		10.0		0.055		10
53rd	June 26, 2020		10.0		0.160		10
54th	June 26, 2020		13.0		0.445		20
55th	September 28, 2020		10.0		0.150		10
56th	September 28, 2020		12.0		0.459		20
57th	December 25, 2020		10.0		0.130		10
58th	December 25, 2020		5.0		0.420		20
59th	June 29, 2021		10.0		0.125		10
60th	June 29, 2021		10.0		0.457		20
61st	September 27, 2021		10.0		0.110		10
62nd	September 27, 2021		10.0		0.439		20
63rd	January 28, 2022		10.0		0.194		10
64th	January 28, 2022		7.0		0.533		20
65th	February 7, 2022		3.0		0.194		10
66th	July 22, 2022		11.0		0.374		10
67th	July 22, 2022		13.0		0.910		20
68th	September 30, 2022		7.5		0.399		10
69th	September 30, 2022		13.0		1.032		20
70th	December 23, 2022		10.0		0.559		10
71st	February 3, 2023		5.0		0.517		5
72nd	March 10, 2023		20.5		0.090		2

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Since November 2014, JICA has issued seven government-guaranteed bonds in international market, totaling $3,980 million. The following table provides JICA’s issuance record of government-guaranteed bonds:


Bond	Issue Date	Amount		Coupon		Term
		(in millions of dollars)		(%)		(years)
1st	November 13, 2014		$500		1.875		5
2nd	October 20, 2016		500		2.125		10
3rd	April 27, 2017		500		2.750		10
4th	June 12, 2018		500		3.375		10
5th	July 22, 2020		500		1.000		10
6th	April 28, 2021		580		1.750		10
7th	May 25, 2022		900		3.250		5

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Summary Financial Information

The table below sets forth summary unaudited financial information of the Finance and Investment Account of JICA as of and for the six months ended September 30, 2022, derived from Japanese financial statements which are prepared in accordance with accounting principles for incorporated administrative agencies generally accepted in Japan. As of September 30, 2022, government investment by Japan contributed to ¥8,265 billion of net assets on the balance sheet of JICA’s Finance and Investment Account and the capital ratio, calculated as total net assets divided by total assets, was 68.42%.

Balance Sheet

(as of September 30, 2022)

Finance and Investment Account


							(Unit: Yen)
Assets
I	Current assets
		Cash and deposits			189,601,067,644
		Loans	14,605,116,377,485
		Allowance for loan losses	(231,966,376,488	)	14,373,150,000,997

		Advance payments			10,959,118,208
		Prepaid expenses			8,655,130
		Accrued income
		Accrued interest on loans	30,775,414,954
		Accrued commitment charges	188,809,746
		Accrued interest	119,619,306		31,083,844,006

		Accounts receivable			473,490,231
		Advances paid			11,180,361
		Short-term guarantee deposits			51,808,000,000
		Derivatives			1,432,010,038

		Total current assets				14,658,527,366,615
II	Non-current assets
	1	Tangible assets
		Buildings	4,034,056,651
		Accumulated depreciation	(1,402,852,269	)
		Accumulated impairment losses	(581,939,170	)	2,049,265,212

		Structures	98,256,953
		Accumulated depreciation	(41,809,607	)
		Accumulated impairment losses	(11,670,468	)	44,776,878

		Machinery and equipment	200,680,532
		Accumulated depreciation	(83,284,220	)
		Accumulated impairment losses	(102,287,680	)	15,108,632

		Vehicles	575,171,384
		Accumulated depreciation	(361,682,952	)	213,488,432

		Tools, furniture, and fixtures	543,399,396
		Accumulated depreciation	(312,184,449	)	231,214,947

		Land	12,703,270,000
		Accumulated impairment losses	(6,091,196,973	)	6,612,073,027

		Construction in progress			48,107,396

		Total tangible assets			9,214,034,524
	2	Intangible assets
		Trademark rights			1,141,292
		Software			2,091,286,560
		Software in progress			2,265,800,137

		Total intangible assets			4,358,227,989

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						(Unit: Yen)
3	Investments and other assets
	Investment securities			14,317,853,210
	Shares of affiliated companies			79,491,929,267
	Money held in trust			96,225,532,375
	Claims probable in bankruptcy, claims probable in rehabilitation, and other	87,062,884,239
	Allowance for loan losses	(87,062,884,239	)	0

	Long-term prepaid expenses			4,709,017
	Long-term guarantee deposits			703,022,563

	Total investments and other assets			190,743,046,432

	Total non-current assets				204,315,308,945

	Total assets						14,862,842,675,560

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Liabilities
I	Current liabilities
		Current portion of bonds		30,000,000,000
		Current portion of borrowings from government fund for Fiscal Investment and Loan Program		97,211,868,000
		Accounts payable		2,988,866,100
		Accrued expenses		9,087,103,043
		Derivatives		22,042,636,924
		Lease obligations		100,205,728
		Deposits received		4,056,841,239
		Provisions
		Provision for bonuses	387,690,024
		Provision for contingent losses	775,133,211	1,162,823,235

		Suspense receipts		1,558,042,846

		Total current liabilities				168,208,387,115

II	Non-current liabilities
		Bonds		1,214,603,920,000
		Discounts on bonds payable		(1,608,923,238	)
		Borrowings from government fund for Fiscal Investment and Loan Program		3,301,631,848,000
		Long-term lease obligations		49,555,324
		Long-term deposits received		6,684,455,563
		Provision for retirement benefits		3,781,943,535
		Asset retirement obligations		105,584,784				��

		Total non-current liabilities				4,525,248,383,968

		Total liabilities							4,693,456,771,083

Net assets
I	Capital
		Government investment		8,265,087,840,510

		Total capital				8,265,087,840,510

II	Retained earnings
		Reserve fund		1,855,344,298,448
		Unappropriated income for the current period		40,883,040,451

		[Total income for the current period]		[40,883,040,451	]
		Total retained earnings				1,896,227,338,899

III	Valuation and translation adjustments
		Valuation difference on shares of affiliated companies		31,229,506,006
		Valuation difference on available-for-sale securities		3,590,316,829
		Deferred gains or losses on hedges		(26,749,097,767	)

		Total valuation and translation adjustments				(8,070,725,068	)

		Total net assets							10,169,385,904,477

		Total liabilities and net assets							14,862,842,675,560

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Statement of Income

(April 1, 2022–September 30, 2022)

Finance and Investment Account


				(Unit: Yen)
Ordinary expenses
Expenses related to operations of cooperation through finance and investment
Interest on bonds and notes	7,344,311,463
Interest on borrowings	7,429,008,390
Interest on interest rate swaps	2,869,990,416
Other Interest expenses	48,851
Operations consignment expenses	4,387,506,837
Bond issuance cost	459,964,112
Loss on derivatives	7,684,391,945
Personnel expenses	1,933,589,921
Provision for bonuses	387,690,024
Retirement benefit expenses	131,395,932
Operating and administrative expenses	6,749,513,374
Depreciation	1,012,966,107
Taxes	96,637,270
Loss on valuation of investment securities	435,273,120
Interest expenses	(8,453	)
Provision for allowance for loan losses	4,747,255,601
Other ordinary expenses	2,270,012		45,671,804,922

Total ordinary expenses					45,671,804,922

Ordinary revenues
Revenues from operations of cooperation through finance and investment
Interest on loans	61,521,990,405
Dividends on investments	4,121,356,057
Commissions	1,579,977,775
Foreign exchange gains	576,015,057
Gain on valuation of shares of affiliated companies	4,895,260
Gain on investment in money held in trust	16,896,751,268
Reversal of provision for allowance for contingent losses	1,422,616,643
Other ordinary revenues	6,441,817		86,130,044,282

Financial revenues
Interest income	324,185,261		324,185,261

Miscellaneous income			81,262,844
Recoveries of written-off claims receivables			19,769,195

Total ordinary revenues					86,555,261,582

Ordinary income					40,883,456,660

Extraordinary losses
Loss on disposal of non-current assets			4,424,185
Loss on sales of non-current assets			44,404		4,468,589

Extraordinary income
Gain on sales of non-current assets			4,052,380		4,052,380

Net income					40,883,040,451

Total income for the current period					40,883,040,451

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The following table shows information related to JICA’s risk-monitored loans, which includes bankrupt or de facto bankrupt assets, doubtful loans and substandard loans (consisting of loans in arrears by three months or more and restructured loans), as of the dates indicated:


	As of March 31									As of September 30
	2020			2021			2022			2022

	(in billions of yen except for ratio)
Bankrupt or De Facto Bankrupt Assets		—			—			—			—
Doubtful Loans	¥	87		¥	87		¥	87		¥	87
Substandard Loans		474			469			610			821
Loans in Arrears by Three Months or More		—			0			0			116
Restructured Loans		474			469			610			704

NPLs Based on the Banking Act and the Financial Reconstruction Act (A)	¥	561		¥	556		¥	697		¥	908
Normal Loans (B)		12,168			12,907			13,477			13,816
Total (C) = (A) + (B)		12,729			13,462			14,174			14,724

A / C (%)		4.40	%		4.13	%		4.92	%		6.17	%

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Board Members

The names, current positions and previous positions of executive officers and auditors as of April 1, 2023 are as follows:


Title	Name	Date of appointment	Previous position
President	TANAKA Akihiko	April 1, 2022	President, National Graduate Institute for Policy Studies (GRIPS)

Executive Senior Vice President	YAMADA Junichi	May 23, 2020	Senior Vice President, JICA

Senior Vice President	YOKOYAMA Tadashi	October 1, 2019 (Reappointment)	Deputy Vice Minister for international affairs, Ministry of Finance

Senior Vice President	NAKAZAWA Keiichiro	May 23, 2020 (Reappointment)	Director General, Operations Strategy Department, JICA

Senior Vice President	SHIBATA Hironori	July 1, 2020 (Reappointment)	Deputy Director-General for International Trade Policy of the Trade Policy Bureau, Ministry of Economy, Trade and Industry of Japan

Senior Vice President	ONODERA Seiichi	July 1, 2021 (Reappointment)	Counselor for Global Strategies, Minister’s Secretariat, Ministry of Land, Infrastructure, Transport and Tourism

Senior Vice President	IMOTO Sachiko	October 1, 2021	Director General, Media and Public Relations Department, JICA

Senior Vice President	ANDO Naoki	October 1, 2022	Director General, Operations Strategy Department, JICA

Senior Vice President	MIYAZAKI Katsura	October 1, 2022	Director General, Governance and Peacebuilding Department, JICA

Senior Vice President	IKURA Yoshinobu	December 1, 2022	Director General, Human Resources Department, JICA

Auditor	SANO Keiko	July 1, 2022	Director General, Economic Development Department, JICA

Auditor	SEKIGUCHI Noriko	July 1, 2022	Outside Auditor, Ryoden Corporation

Auditor	AKAHANE Takashi	December 1, 2022	Partner at Anderson Mori & Tomotsune

(1)	Senior vice presidents and auditors are listed in the order of their appointment.

(2)	Number of executive officers and auditors: pursuant to Article 7 of the JICA Act, there shall be one president and three auditors, and there may be one executive senior vice president and up to eight senior vice presidents.

(3)

Terms of office of executive officers and auditors: Pursuant to Article 21 of the Act on General Rules for Incorporated Administrative Agencies, the term of office of the president is from the date of appointment until the last day of the mid-term plan currently in effect at the time of the appointment, and the term of office of each auditor is from the date of appointment until the date that the audited financial statements covering the final fiscal year of the mid-term plan for which such auditor is responsible are approved. Pursuant to Article 9 of the JICA Act, the term of office of the executive senior vice president, if any, is four years, and the term of office of the senior vice presidents, if any, is two years.

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Japan

The following information and tables update the information and tables relating to Japan in the Japan 18-K 2022 and the SEC Base Prospectus. The following section has been updated to reflect current information and has not been revised in its entirety. In the following section, information pertaining to previous years is provided solely for your convenience.

GENERAL

Area and Population

Japan has a total population of approximately 124 million (estimated as of April 1, 2023). It has one of the highest population densities in the world and approximately 24.3% of its people (estimated as of October 1, 2022) are concentrated in three metropolitan areas (Tokyo, Osaka and Nagoya). Japan’s rate of population decrease during the years 2018-2022 was 1.4%. Japan’s population decreased 0.4% during the 12 months ended October 1, 2022 (estimated as of October 1, 2022).

Political Parties

The following tables set forth the membership by political party of the House of Representatives as of April 25, 2023 and the House of Councillors as of April 27, 2023.


	House of Representatives
Liberal Democratic Party		263
The Constitutional Democratic Party of Japan and the Independent		97
Nippon Ishin (Japan Innovation Party)		41
Komeito		32
Democratic Party For the People		10
Japanese Communist Party		10
Yushi no Kai		5
REIWA SHINSENGUMI		3
Independents		4
Vacancies		0

Total		465

Source: House of Representatives.

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	House of Councillors
Liberal Democratic Party		119
The Constitutional Democratic Party of Japan and Social Democratic Party		40
Komeito		27
Nippon Ishin (Japan Innovation Party)		21
Democratic Party For the People and The Shin-Ryokufukai		13
Japanese Communist Party		11
REIWA SHINSENGUMI		5
Okinawa Whirlwind		2
seijikajoshi48party		2
Independents		8
Vacancies		0

Total		248

Source: House of Councillors.

International Trade Agreements

Japan signed an agreement to join the Trans Pacific Partnership, or TPP, on February 4, 2016. Upon the ratification of the TPP, Japan and the other participating countries planned to not only eliminate tariffs on products but also liberalize services and investment, and establish rules in a wide range of fields, including intellectual property, e-commerce and the environment. Although Japan ratified the TPP on January 20, 2017, the United States announced its formal withdrawal from the TPP on January 23, 2017. On March 8, 2018, Japan and ten other countries excluding the United States signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, pursuant to which each signatory country agreed to start the necessary preparations for the implementation of the TPP. The CPTPP entered into force for Japan, Mexico, Singapore, New Zealand, Canada, and Australia on December 30, 2018, for Vietnam on January 14, 2019, for Peru on September 19, 2021, for Malaysia on November 29, 2022 and for Chile on February 21, 2023. On February 1, 2021, the United Kingdom formally applied to join the CPTPP. On March 31, 2023, the United Kingdom and the members of the CPTTP concluded negotiations on the United Kingdom’s accession to the CPTPP. The United Kingdom is expected to join the CPTPP after ratification of the formal agreement by the United Kingdom and each of the party states.

Japan has also entered into Economic Partnership Agreements, or EPAs, with various countries, including Singapore, Mexico, Malaysia, Chile and Thailand. As of February 2023, Japan had entered into a total of 21 EPAs (including the TPP) with 24 countries and regions. Pursuant to the EPAs, Japan will collaborate comprehensively with the counterparties to, among other things, reduce or eliminate tariffs, grant most-favored-nation status in the fields of investment, services and government procurement and expedite patent review and enhance patent protection in the field of intellectual property.

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THE ECONOMY

General

Economic activity in Japan has been significantly restricted by the COVID-19 pandemic and the measures implemented to slow the spread of the disease. Due primarily to the impact of the COVID-19 pandemic, real GDP decreased by 4.1% during JFY 2020 compared to the prior year. In response to this pandemic, the Japanese government and the BOJ have announced a number of fiscal, monetary and economic measures aimed at mitigating the resulting economic impact. While the COVID-19 pandemic is expected to continue to have a significant negative impact on the Japanese economy, the duration and extent of the economic impact of COVID-19 remain highly uncertain.

In order to slow the spread of COVID-19, the Japanese central and local governments have implemented a number of measures, including the declaration of multiple states of emergency by the Prime Minister of Japan. In addition, the emergence of a new COVID-19 variant in late 2021 prompted the Japanese government to re-impose international travel restrictions including closure of international borders to almost all foreign nationals and resulted in the introduction of certain other preventative measures. These restrictions had, and may further have in the future a severe impact on both business travel and inbound international tourism, an important and formerly growing sector of the Japanese economy. According to the Monthly Economic Report published by the Cabinet Office of Japan for April 2023, published on April 25, 2023, parts of the economy are showing weakness, while economic activity is recovering moderately as the impact of COVID-19 eases. Although many of the preventative measures such as restrictions on international travel have been recently relaxed, the number of infections continues to be high, and the duration and extent of the economic impact of COVID-19 still remain highly uncertain.

In addition, the global economy has recently been impacted by Russia’s large-scale military activity against Ukraine that was initiated in February 2022 and the related economic sanctions imposed on certain Russian entities and persons by many major countries. In particular, financial and commodity markets have experienced significant volatility and energy prices have sharply increased mainly due to concerns regarding disruptions in oil and natural gas supply. Driven in part by increases in energy prices as well as increases in raw materials prices, there has been a significant inflationary trend in consumer prices in many major economies including Japan, and monetary authorities in some major economies have been tightening monetary policy in response to this trend. Depending on how the conflict develops and any additional economic sanctions imposed on Russia, as well as the impact of inflation and monetary policy developments and economic conditions in Japan and globally may be negatively impacted for an uncertain period of time.

Specifically with respect to Japan, the year-on-year rate of increase in the consumer price index (the “CPI”) (all items less fresh food) is expected to be relatively high over the short term due to the effects of cost increases, led by a rise in import prices, being passed through to consumers. The Japanese government’s measures to reduce the household burden of higher gasoline prices, electricity charges, and manufactured and piped gas charges are expected to push down the year-on-year rate of change in the CPI (all items less fresh food) during the first half of fiscal 2023.

Thereafter, inflation is projected to moderately increase on the back of improvement in the output gap, rises in medium- to long-term inflation expectations and in wage growth and the waning effects of economic measures pushing down energy prices.

While it is not clear how inflation will affect the Japanese yen, consumer and industrial prices in Japan, it is possible that inflationary trends may negatively affect the Japanese economy.

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Summary of Key Economic Indicators

The following tables set forth information regarding certain of Japan’s key economic indicators for the periods indicated:


	JFY 2017			JFY 2018			JFY 2019			JFY 2020			JFY 2021			JFY 2022

	(yen amounts in billions, except percentages and index)
Percentage Changes of GDP from Previous Year
At Nominal Prices		2.0	%		0.2	%		0.0	%		-3.5	%		2.4	%		—
At Real Prices^(a)		1.8			0.2			-0.8			-4.1			2.6			—
Total Revenues of Consolidated General and Special Accounts^(b)	¥	244,729		¥	243,868		¥	251,292		¥	353,277		¥	322,651		¥	319,637
Total Expenditures of Consolidated General and Special Accounts^(b)		229,389			226,661			232,905			305,846			285,348			310,052
Surplus of Consolidated Revenues over Consolidated Expenditures^(b)		15,340			17,206			18,387			47,431			37,303			9,584
Public Debt		934,321			954,863			965,926			993,542			1,037,735			—

(a)	Real prices are based on calendar year 2015.

(b)	The data for JFY 2022 is the provisional results as of December 31, 2022.

Source: Economic and Social Research Institute; Cabinet Office; and Ministry of Finance.


	2018			2019			2020			2021			2022

	(yen or dollar amounts in billions, except percentages and index)
Unemployment Rate		2.4	%		2.4	%		2.8	%		2.8	%		2.6
Consumer Price Index^(a)		99.5			100.0			100.0			99.8			102.3
Annual Change		1.0	%		0.5	%		0.0	%		-0.2	%		2.5	%
Corporate Goods Price Index^(b)		101.0			101.2			100.0			104.6			114.7
Annual Change		2.6	%		0.2	%		-1.2	%		4.6	%		9.7	%
Current Account regarding Balance of Payments	¥	19,505		¥	19,251		¥	15,992		¥	21,536		¥	11,547
Official Foreign Exchange Reserves	$	1,271		$	1,324		$	1,395		$	1,406		$	1,228

(a)	Calendar year 2020=100.

(b)	Calendar year 2020=100. Indices are calculated using the monthly averages.

Source: Ministry of Internal Affairs and Communications “Labor Force Survey”; Consumer Price Index, Statistics Bureau, Ministry of Internal Affairs and Communications; Domestic Corporate Goods Price Index, Bank of Japan; and Ministry of Finance.

Gross Domestic Product and National Income

In December 2016, the methodology of calculating Japan’s GDP was revised to implement the System of National Accounts 2008 (2008 SNA), the latest version of the international statistical standard for the national accounts adopted by the United Nations Statistical Commission, as well as other changes. In December 2020, the methodology of calculating Japan’s GDP was further revised to change the benchmark year for real prices from 2011 to 2015. Revised GDP figures based on this methodology were published for prior years starting from JFY 1994. The GDP figures set forth in the tables below reflect this revised methodology.

The following table sets forth information pertaining to Japan’s gross domestic product for JFY 2017 through JFY 2021. Nominal GDP increased by 2.4% during JFY 2021, and the annual growth rate of real GDP was 2.6%. While the duration and extent of the economic impact of COVID-19 remain highly uncertain, it is likely that the continued spread of COVID-19 will have a significant negative impact on the Japanese economy, including with respect to nominal and real GDP.

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Gross Domestic Product^(a)


	JFY 2017			JFY 2018			JFY 2019			JFY 2020			JFY 2021			Percentage of JFY 2021 GDP

	(yen amounts in billions)
Total Consumption
Private sectors	¥	303,006		¥	304,774		¥	303,859		¥	288,504		¥	296,284			53.8	%
Public sectors		107,707			109,089			111,827			113,798			118,968			21.6

		410,713			413,863			415,686			402,302			415,251			75.4
Total Gross Capital Formation
Private sectors
Producers’ Durable Equipment		90,183			92,386			91,643			86,041			90,078			16.4
Residential Construction		21,248			20,539			21,393			19,869			21,129			3.8
Public sectors		27,687			28,391			29,297			30,839			29,807			5.4

		139,118			141,315			142,332			136,749			141,013			25.6
Additions to Business Inventories
Private sectors		1,748			2,212			883			(960	)		1,104			0.2
Public sectors		89			(71	)		(5	)		(101	)		(90	)		(0.0	)

		1,838			2,141			878			(1,061	)		1,015			0.2
Net Exports of Goods and Services		4,044			(749	)		(2,060	)		(429	)		(6,718	)		(1.2	)

Nominal Gross Domestic Expenditures	¥	555,713		¥	556,571		¥	556,836		¥	537,562		¥	550,561			100.0	%

Real Gross Domestic Expenditures^(b)	¥	553,174		¥	554,546		¥	550,138		¥	527,365		¥	540,924

Surplus of the Nation on Current Account
Exports of Goods and Services and Other Receipts from Abroad		31,346			33,864			34,329			29,794			41,193
Less: Imports of Goods and Services and Other Payments Abroad		11,026			12,153			12,483			10,156			11,943

		20,320			21,712			21,847			19,639			29,251

Gross National Income	¥	576,033		¥	578,282		¥	578,683		¥	557,200		¥	579,812
Percentage Changes of GDP from Previous Year
At Nominal Prices		2.0	%		0.2	%		0.0	%		(3.5	)%		2.4	%
At Real Prices^(b)		1.8			0.2			(0.8	)		(4.1	)		2.6
Deflator^(c)		0.2			(0.1	)		0.8			0.7			(0.1	)

(a)	GDP financial data are subject to change.

(b)	Real prices are based on calendar year 2015.

(c)	Deflator is a price index used to convert nominal prices into real prices. Deflator is derived by dividing nominal GDP by real GDP.

Source: Economic and Social Research Institute, Cabinet Office.

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The following table sets forth information pertaining to Japan’s gross domestic product, as seasonally adjusted, for each of the eight quarters ended December 31, 2022.


	Quarterly Gross Domestic Product^(a)
	2021												2022
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			First Quarter			Second Quarter			Third Quarter			Fourth Quarter

	(yen amounts in billions)
Nominal Gross Domestic Expenditures^(b)	¥	548,404		¥	550,677	��	¥	547,719		¥	551,480		¥	552,833		¥	558,619		¥	554,151		¥	560,607

Real Gross Domestic Expenditures^(b)(c)	¥	538,460		¥	540,331		¥	538,396		¥	544,377		¥	541,844		¥	548,075		¥	546,608		¥	546,735

Percentage Changes of GDP from the Previous Quarter
At Nominal Prices^(d)		0.0	%		0.4	%		(0.5	)%		0.7	%		0.2	%		1.0	%		(0.8	)%		1.2	%
At Real Prices^(c)(d)		(0.2	)		0.3			(0.4	)		1.1			(0.5	)		1.2			(0.3	)		0.0
Deflator^(e)		0.2			0.1			(0.2	)		(0.4	)		0.7			(0.1	)		(0.5	)		1.1

(a)	Quarterly GDP financial data are subject to change.

(b)	Numbers are based on seasonally-adjusted GDP figures.

(c)	Real prices are based on calendar year 2015.

(d)	Percentage changes are based on seasonally-adjusted GDP figures.

(e)	Deflator is a price index used to convert nominal prices into real prices. Deflator is derived by dividing nominal GDP by real GDP.

Source: Economic and Social Research Institute, Cabinet Office.

Energy

The following table sets forth the total amounts of primary energy supplied and the percentages supplied by different sources for JFY 2017 through JFY 2021.


JFY	Total Primary Energy Supplied (peta- joules)		Sources of Primary Energy Supplied^(a)
JFY	Total Primary Energy Supplied (peta- joules)		Oil			Coal			Nuclear			Natural Gas			Other
2017		20,072		39.0	%		25.1	%		1.4	%		23.4	%		11.1	%
2018^(b)		19,692		37.5			25.1			2.8			22.9			11.7
2019^(b)		19,119		37.1			25.4			2.8			22.4			12.4
2020^(b)		17,942		36.4			24.6			1.8			23.8			13.3
2021^(b)		18,670		36.0			25.8			3.2			21.4			13.6

(a)	Figures represent the proportion of each source as a share of the domestic primary energy supplied. Domestic primary energy supplied is total primary energy supplied less exports and inventory adjustments.

(b)	Standard heating value by energy source, which is used to create total primary energy supplied statistics, is revised every five years. Figures for 2018 through 2021 represent the revised standard heating value by energy source.

Source: Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry, Report on Energy Supply and Demand.

Since JFY 2011, largely due to the effects of the Earthquake, the import of oil and natural gas as alternatives to nuclear energy increased significantly as the demand increased for power generation at thermal power stations.

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The table below sets forth information regarding crude oil imports for JFY 2018 through JFY 2022.


	JFY 2018		JFY 2019		JFY 2020		JFY 2021		JFY 2022
Volume of imports (thousand kilo-liters per day)		475		471		385		403		430
Cost of imports (c.i.f. in billions of yen)	¥	8,721	¥	7,980	¥	4,058	¥	8,018	¥	13,694
Average price (c.i.f. in yen kilo-liters)	¥	50,274	¥	46,389	¥	28,872	¥	54,523	¥	87,207

Source: Customs and Tariff Bureau, Ministry of Finance.

Japan has historically depended on oil for most of its energy requirements and almost all its oil is imported, mostly from the Middle East. Oil price movements thus have a major impact on the domestic economy. The Oil price has fluctuated significantly in recent years, reaching approximately ¥75,000 per kilo-liter in January 2014, then dropping below ¥37,000 per kilo-liter in February 2015, and increasing again to approximately ¥50,000 per kilo-liter in June 2015. In the first quarter of 2016, oil price dropped below ¥30,000 per kilo-liter due to oversupply and uncertainties regarding the Chinese economy. After the first quarter, oil price began increasing due to the mild recovery of the world economy and the OPEC agreement to reduce production. Although the oil price significantly declined soon after the outbreak of COVID-19 in 2020, below ¥20,000 per kilo-liter in May 2020, it has steadily increased since then, as the world economy has gradually recovered from the impact of COVID-19. Recently, the oil price has increased sharply to ¥72,421 per kilo-liter in March 2023, in part due to the conflict between Russia and Ukraine and the resulting disruption in the oil supply.

Japan has worked to reduce its dependence on oil by encouraging energy conservation and the use of alternative fuels. In addition, a restructuring of industry, with emphasis shifting from primary industries to processing and assembly type industries and from manufacturing industry to service industry, has also contributed to a reduction in oil consumption.

The following table sets forth information relating to total electric power generating capacity and electric power generation for JFY 2017 through JFY 2021.


	JFY 2017		JFY 2018		JFY 2019		JFY 2020		JFY 2021

	(megawatts)
Electric power generating capacity^(a):
Fossil Fuel		193,462		193,026		189,784		191,758		188,256
Hydro-electric		50,014		50,037		50,033		50,033		50,009
Nuclear		39,132		38,042		33,083		33,083		33,083
Other		16,600		18,988		20,997		23,677		25,851

Total		299,209		300,093		293,897		298,550		297,197

	(gigawatt-hours)
Electric power generation:
Fossil Fuel		861,435		823,589		792,810		789,725		776,326
Hydro-electric		90,128		87,398		86,314		86,310		87,632
Nuclear		31,278		62,109		61,035		37,011		67,767
Other		24,500		27,311		30,611		35,637		38,525

Total		1,007,341		1,000,409		970,771		948,979		970,249

(a)	At the end of fiscal year—March 31

Source: Handbook of Electric Power Industry, Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry.

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Price Indices

The table below sets forth information concerning changes in Japan’s corporate goods and consumer price indices for the periods indicated.


	Corporate Goods Price Index^(a)				Consumer Price Index^(b)
	Index^(c)		Annual % Change		Index		Annual % Change
2018		101.0		2.6		99.5		1.0
2019		101.2		0.2		100.0		0.5
2020		100.0		-1.2		100.0		0.0
2021		104.6		4.6		99.8		-0.2
2022		114.7		9.7		102.3		2.5

(a)

All commodities. Calendar year 2020=100. Source: Domestic Corporate Goods Price Index, Bank of Japan.

(b)

General index. Calendar year 2020=100. Source: Consumer Price Index, Statistics Bureau, Ministry of Internal Affairs and Communications.

(c)

Indices are calculated using the monthly averages.

Labor

The number of employees increased from the year 2004 to 2007, and decreased from 2008 to 2012. After recovering in 2013, the number of employees increased from 2014 to 2019, followed by a decrease in 2020, the first in eight years. In 2021, the average employment was estimated at 67.1 million, of which 22.8% were employed in mining, manufacturing and construction, 3.0% were employed in agriculture, forestry and fisheries, and 74.1% in services and other sectors. In 2022, the average employment was estimated at 67.2 million, of which 22.7% were employed in mining, manufacturing and construction, 3.1% were employed in agriculture, forestry and fisheries, and 74.3% were employed in services and other sectors. The unemployment rate (seasonally adjusted) in Japan gradually increased from 2008 to the middle of 2009, but has gradually decreased since the end of 2009. In 2020, the unemployment rate increased for the first time in eleven years. It ranged between 2.5% and 2.8% during 2022. The seasonally adjusted unemployment rate was 2.5% for November and 2.5% for December in 2022, and 2.4% for January, 2.6% for February and 2.8% for March in 2023, the most recent five months for which statistics are available. Concerning short-term prospects, employment conditions in Japan are expected to continue to improve notwithstanding the effects of the COVID-19 pandemic and the resulting disruption of business activities. However, both the duration and extent of the impact on employment in Japan remain highly uncertain.

The following table indicates unemployment statistics for Japan for each of the last five years:


Calendar Year	Unemployment Rate (%)
2018		2.4
2019		2.4
2020		2.8
2021		2.8
2022		2.6

Source: Ministry of Internal Affairs and Communications “Labor Force Survey”.

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The table below sets forth information regarding wage index (total cash earnings (nominal)) and industrial production index (manufacturing and mining) for the periods indicated.


	Wage Index^(a)				Industrial Production Index^(b)
Calendar Year	Index^©		Annual % Change		Index		Annual % Change
2018		101.6		1.4		104.2		1.1
2019		101.2		-0.4		101.1		-3.0
2020		100.0		-1.2		90.6		-10.4
2021		100.3		0.3		95.7		5.6
2022		102.3		2.0		95.6		-0.1

(a)

Calendar year 2020=100. Source: Monthly Labor Survey, Ministry of Health, Labor and Welfare.

(b)

Calendar year 2015=100. Source: Ministry of Economy, Trade and Industry.

(c)

Indices are calculated using the monthly averages.

The following table shows selected employment information by industry.


	2018			2019			2020			2021			2022

	(all figures in percentages, except as indicated)
Employed persons (in thousands of persons)		66,820			67,500			67,100			67,130			67,230
Employment by Industry:
Agriculture, forestry and fisheries		3.41	%		3.29	%		3.17	%		3.10	%		3.05	%
Mining, manufacturing and construction		23.53			23.26			23.06			22.84			22.68
Services and other sectors		73.06			73.45			73.77			74.07			74.27

Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Source: Ministry of Internal Affairs and Communications “Labor Force Survey”. The following table shows employment rate by age and gender.
	2018			2019			2020			2021			2022

	(all figures in percentages)
Total		60.0	%		60.6	%		60.3	%		60.4	%		60.9	%
Employment rate by age:
15 - 64 years old		76.8			77.7			77.3			77.7			78.4
15 - 24 years old		45.9			47.5			46.4			46.6			46.6
25 - 34 years old		84.8			85.3			85.1			86.0			86.6
35 - 44 years old		85.0			85.6			85.0			85.4			86.2
45 - 54 years old		85.7			86.4			86.0			86.0			86.6
55 - 64 years old		75.2			76.3			76.7			77.0			78.1
55 - 59 years old		81.7			82.3			82.2			82.1			82.8
60 - 64 years old		68.8			70.3			71.0			71.5			73.0
65 and over		24.3			24.9			25.1			25.1			25.2
65 - 69 years old		46.6			48.4			49.6			50.3			50.8
70 - 74 years old		30.2			32.2			32.5			32.6			33.5
75 and over		9.8			10.3			10.4			10.5			11.0
25 - 44 years old		84.9			85.5			85.0			85.7			86.4
Employment rate by gender:
Male		69.3			69.7			69.3			69.1			69.4
Female		51.3			52.2			51.8			52.2			53.0
Source: Ministry of Internal Affairs and Communications “Labor Force Survey”.

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The following table shows employment data by type of employment.


	2018		2019		2020		2021		2022

	(in thousands of persons)
Employee (except for executive of company or corporation)		56,170		56,880		56,550		56,620		56,890
Regular employee		34,920		35,150		35,560		35,870		35,880
Non-regular employee		21,260		21,730		21,000		20,750		21,010

Source: Ministry of Internal Affairs and Communications “Labor Force Survey”.

Aging Workforce and Population Decrease

The following table indicates the age distribution of Japan’s population:

Population and Percentage distribution by Age (5-Year Age Group)


	Both sex
Age groups	2018		2019		2020		2021		2022

	Population (in thousands of persons)
Total		126,443		126,167		126,146		125,502		124,947

0 - 4 years old		4,838		4,758		4,541		4,389		4,247
5 - 9		5,184		5,101		5,114		5,038		4,948
10 - 14		5,392		5,351		5,376		5,357		5,308
15 - 19		5,907		5,820		5,706		5,580		5,512
20 - 24		6,330		6,388		6,320		6,263		6,263

25 - 29		6,223		6,240		6,384		6,379		6,412
30 - 34		6,936		6,752		6,714		6,556		6,446
35 - 39		7,694		7,551		7,498		7,354		7,212
40 - 44		9,093		8,718		8,476		8,173		7,946
45 - 49		9,666		9,802		9,868		9,732		9,462

50 - 54		8,360		8,567		8,738		9,252		9,435
55 - 59		7,651		7,711		7,940		7,824		8,075
60 - 64		7,591		7,523		7,442		7,391		7,445
65 - 69		9,368		8,709		8,236		7,869		7,535
70 - 74		8,234		8,686		9,189		9,672		9,337

75 - 79		6,932		7,241		7,065		6,712		7,030
80 - 84		5,347		5,328		5,404		5,563		5,743
85 - 89		3,514		3,612		3,742		3,872		3,955
90 - 94		1,674		1,761		1,811		1,904		1,989
95 - 99		439		479		500		537		561

100 and over		69		69		80		85		87

Regrouped
0 - 14 years old		15,415		15,210		15,032		14,784		14,503
15 - 64		75,451		75,072		75,088		74,504		74,208
65 and over		35,578		35,885		36,027		36,214		36,236
65 - 74 years old		17,603		17,395		17,425		17,540		16,872
75 and over		17,975		18,490		18,602		18,674		19,364

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	Both sex
Age groups	2018		2019		2020		2021		2022

	Percentage Distribution (%)
Total		100.00		100.00		100.00		100.00		100.00

0 - 4 years old		3.83		3.77		3.60		3.50		3.40
5 - 9		4.10		4.04		4.05		4.01		3.96
10 - 14		4.26		4.24		4.26		4.27		4.25
15 - 19		4.67		4.61		4.52		4.45		4.41
20 - 24		5.01		5.06		5.01		4.99		5.01

25 - 29		4.92		4.95		5.06		5.08		5.13
30 - 34		5.49		5.35		5.32		5.22		5.16
35 - 39		6.08		5.98		5.94		5.86		5.77
40 - 44		7.19		6.91		6.72		6.51		6.36
45 - 49		7.64		7.77		7.82		7.75		7.57

50 - 54		6.61		6.79		6.93		7.37		7.55
55 - 59		6.05		6.11		6.29		6.23		6.46
60 - 64		6.00		5.96		5.90		5.89		5.96
65 - 69		7.41		6.90		6.53		6.27		6.03
70 - 74		6.51		6.88		7.28		7.71		7.47

75 - 79		5.48		5.74		5.60		5.35		5.63
80 - 84		4.23		4.22		4.28		4.43		4.60
85 - 89		2.78		2.86		2.97		3.09		3.17
90 - 94		1.32		1.40		1.44		1.52		1.59
95 - 99		0.35		0.38		0.40		0.43		0.45

100 and over		0.05		0.05		0.06		0.07		0.07

Regrouped
0 - 14 years old		12.19		12.06		11.92		11.78		11.61
15 - 64		59.67		59.50		59.52		59.36		59.39
65 and over		28.14		28.44		28.56		28.86		29.00
65 - 74 years old		13.92		13.79		13.81		13.98		13.50
75 and over		14.22		14.66		14.75		14.88		15.50

If the population of Japan continues to decrease, it may have a material adverse impact on Japan’s overall socioeconomics in the future, including with respect to economic scale, standard of living and sustainability of the social security system.

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FOREIGN TRADE AND BALANCE OF PAYMENTS

Foreign Trade

Japan is one of the leading trading nations of the world, ranking fifth to China, the United States, Germany and the Netherlands in merchandise exports and ranking fifth to the United States, China, Germany and Netherlands in merchandise imports among the IMF member countries in 2022.

In 2021, Japan had a trade deficit of ¥1,784 billion due to an increase in imports including crude oil and non-ferrous metals, which was partially offset by an increase in exports including steel and automobile parts. In 2022, Japan had a trade deficit of ¥19,966 billion due to an increase in imports including crude oil and coal, which was partially offset by an increase in exports including automobiles and mineral fuel. However, potential international trade disruptions resulting from the conflict between Russia and Ukraine on exports, imports and the overall trade balance is highly uncertain.

The following tables set forth information relating to foreign trade for the years indicated. In these tables exports are stated on a free on board (“f.o.b.”) basis and imports on a cost insurance and freight (“c.i.f.”) basis. Monetary figures are based on actual movements of goods as calculated by the Ministry of Finance. (This method of computation differs from that used in calculating balance of payments, in which both exports and imports are stated on an f.o.b. basis.)

Foreign Trade of Japan


	Value Index^(a)				Quantum Index^(a)				Unit Value Index^(a)				Terms of Trade^(b)
	Exports		Imports		Exports		Imports		Exports		Imports		Index
2018		107.8		105.5		107.7		105.8		100.1		99.7		100.4
2019		101.7		100.2		103.0		104.6		98.8		95.9		103.0
2020		90.5		86.7		91.0		97.9		99.4		88.6		112.2
2021		109.9		108.3		101.9		102.8		107.8		105.3		102.4
2022		129.8		150.7		100.0		102.5		129.9		147.0		88.4

(a)	Calendar year 2015=100.

(b)	Unit value index of exports divided by unit value index of imports, multiplied by 100.

Source: Japan Tariff Association, Ministry of Finance.

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Composition of Japan’s Exports and Imports


	2018				2019				2020				2021				2022

	(yen amounts in billions)
JAPAN’S EXPORTS
Textile Products	¥	901	1.1	%	¥	886	1.2	%	¥	754	1.1	%	¥	862	1.0	%	¥	1,003	1.0	%
Metals and Metal Products		6,257	7.7			5,659	7.4			5,204	7.6			7,140	8.6			8,556	8.7
Machinery and Equipment:
Ships		1,368	1.7			1,493	1.9			1,142	1.7			1,050	1.3			1,157	1.2
Motor Vehicles		12,307	15.1			11,971	15.6			9,580	14.0			10,722	12.9			13,012	13.3
TV and Radio Receivers		117	0.1			116	0.2			89	0.1			96	0.1			72	0.1
Motorcycles		337	0.4			267	0.3			225	0.3			307	0.4			414	0.4
Scientific and Optical Instruments		2,314	2.8			2,130	2.8			1,968	2.9			2,322	2.8			2,511	2.6
Other^(a)		35,501	43.6			32,700	42.5			29,532	43.2			35,803	43.1			40,753	41.5

Total Machinery and Equipment		51,944	63.8			48,678	63.3			42,536	62.2			50,300	60.5			57,918	59.0
Chemicals		8,922	10.9			8,739	11.4			8,534	12.5			10,552	12.7			11,794	12.0
Foods and Beverages		741	0.9			754	1.0			790	1.2			992	1.2			1,137	1.2
Other Exports^(b)		12,714	15.6			12,216	15.9			10,581	15.5			13,244	15.9			17,767	18.1

Grand Total	¥	81,479	100.0	%	¥	76,932	100.0	%	¥	68,399	100.0	%	¥	83,091	100.0	%	¥	98,175	100.0	%

JAPAN’S IMPORTS
Foods and Beverages	¥	7,247	8.8	%	¥	7,192	9.1	%	¥	6,679	9.8	%	¥	7,383	8.7	%	¥	9,492	8.0	%
Raw Materials		4,992	6.0			4,861	6.2			4,682	6.9			6,936	8.2			8,107	6.9
Chemicals		8,550	10.3			8,163	10.4			7,859	11.6			9,769	11.5			13,297	11.3
Mineral Fuels:
Petroleum		8,906	10.8			7,969	10.1			4,646	6.8			6,929	8.2			13,269	11.2
Coal		2,812	3.4			2,528	3.2			1,708	2.5			2,801	3.3			7,810	6.6
Other^(c)		7,576	9.2			6,453	8.2			4,900	7.2			7,277	8.6			12,430	10.5

Total Mineral Fuel		19,294	23.3			16,951	21.6			11,254	16.5			17,007	20.0			33,509	28.4
Machinery and Equipment		25,952	31.4			25,319	32.2			22,973	33.8			26,766	31.5			32,510	27.5
Other Imports^(d)		16,669	20.2			16,114	20.5			14,564	21.4			17,014	20.0			21,225	18.0

Grand Total	¥	82,703	100.0	%	¥	78,600	100.0	%	¥	68,011	100.0	%	¥	84,875	100.0	%	¥	118,141	100.0	%

(a)	This category includes general machinery, electronic components including semiconductors and electronic equipment including electronic circuit.

(b)	This category includes raw materials, mineral fuels and vehicle parts.

(c)	This category includes liquid natural gas and petroleum products.

(d)	This category includes clothing and accessories thereof, non-ferrous metal and scientific and optical instruments.

Source: The Summary Report on Trade of Japan, Japan Tariff Association, Ministry of Finance.

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Geographic Distribution of Japan’s Exports and Imports


	2018				2019				2020				2021				2022

	(yen amounts in billions)
JAPAN’S EXPORTS
Asia	¥	44,736	54.9	%	¥	41,327	53.7	%	¥	39,220	57.3	%	¥	48,158	58.0	%	¥	55,408	56.4	%
China		15,898	19.5			14,682	19.1			15,082	22.1			17,984	21.6			19,004	19.4
(Asia NIES)		16,888	20.7			15,597	20.3			14,808	21.6			17,849	21.5			21,256	21.7
(ASEAN)		12,634	15.5			11,578	15.1			9,843	14.4			12,461	15.0			15,545	15.8
Oceania		2,402	2.9			2,053	2.7			1,688	2.5			2,194	2.6			2,816	2.9
Australia		1,886	2.3			1,580	2.1			1,295	1.9			1,675	2.0			2,173	2.2
North America		16,500	20.3			16,222	21.1			13,384	19.6			15,748	19.0			19,387	19.7
U.S.A.		15,470	19.0			15,255	19.8			12,611	18.4			14,832	17.8			18,255	18.6
Canada		1,029	1.3			968	1.3			773	1.1			917	1.1			1,132	1.2
Central and South America		3,399	4.2			3,221	4.2			2,285	3.3			3,086	3.7			3,737	3.8
Western Europe		9,389	11.5			9,010	11.7			7,651	11.2			8,851	10.7			10,741	10.9
EU		9,209	11.3			8,955	11.6			6,460	9.4			7,668	9.2			9,359	9.5
Central and Eastern Europe, Russia etc.		1,719	2.1			1,757	2.3			1,514	2.2			1,946	2.3			2,034	2.1
Russia		805	1.0			783	1.0			628	0.9			862	1.0			604	0.6
Middle East		2,434	3.0			2,356	3.1			1,809	2.6			2,052	2.5			2,782	2.8
Africa		900	1.1			984	1.3			848	1.2			1,055	1.3			1,272	1.3

Total	¥	81,479	100.0	%	¥	76,932	100.0	%	¥	68,399	100.0	%	¥	83,091	100.0	%	¥	98,175	100.0	%

JAPAN’S IMPORTS
Asia	¥	39,218	47.4	%	¥	37,413	47.6	%	¥	34,678	51.0	%	¥	41,094	48.4	%	¥	53,367	45.2	%
China		19,194	23.2			18,454	23.5			17,508	25.7			20,382	24.0			24,843	21.0
(Asia NIES)		7,859	9.5			7,231	9.2			6,706	9.9			8,293	9.8			10,940	9.3
(ASEAN)		12,399	15.0			11,757	15.0			10,678	15.7			12,483	14.7			17,701	15.0
Oceania		5,659	6.8			5,587	7.1			4,359	6.4			6,434	7.6			12,681	10.7
Australia		5,053	6.1			4,958	6.3			3,831	5.6			5,753	6.8			11,612	9.8
North America		10,318	12.5			9,935	12.6			8,631	12.7			10,430	12.3			13,913	11.8
U.S.A.		9,015	10.9			8,640	11.0			7,454	11.0			8,916	10.5			11,733	9.9
Canada		1,295	1.6			1,286	1.6			1,169	1.7			1,507	1.8			2,169	1.8
Central and South America		3,226	3.9			3,169	4.0			2,998	4.4			3,679	4.3			4,830	4.1
Western Europe		10,370	12.5			10,394	13.2			9,021	13.3			10,860	12.8			12,960	11.0
EU		9,718	11.8			9,722	12.4			7,832	11.5			9,453	11.1			11,392	9.6
Central and Eastern Europe, Russia etc.		2,546	3.1			2,333	3.0			1,843	2.7			2,375	2.8			2,984	2.5
Russia		1,723	2.1			1,561	2.0			1,145	1.7			1,552	1.8			1,969	1.7
Middle East		10,375	12.5			8,852	11.3			5,558	8.2			8,471	10.0			15,423	13.1
Africa		991	1.2			918	1.2			922	1.4			1,531	1.8			1,982	1.7

Grand Total	¥	82,703	100.0	%	¥	78,600	100.0	%	¥	68,011	100.0	%	¥	84,875	100.0	%	¥	118,141	100.0	%

(a)	Data after February 2020 does not include the United Kingdom, as the United Kingdom exited the European Union (EU) on January 31, 2020.

Source: Press Releases, Ministry of Finance.

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Balance of Payments

In 2022, Current Account surplus decreased to ¥11,547 billion, mainly due to an increase in Imports influenced by increases in the price of energy throughout the year.

Balance of Payments of Japan


	2018		2019		2020		2021		2022

	(in billions of yen)
Current Account	¥	19,505	¥	19,251	¥	15,992	¥	21,536	¥	11,547
Balance on Goods and Services		105		-932		-877		-2,483		-21,164
Trade Balance		1,127		150		2,778		1,762		-15,744
Exports (f.o.b.)		81,226		75,775		67,263		82,353		98,769
Imports (f.o.b.)		80,100		75,625		64,485		80,590		114,512
Services		-1,021		-1,082		-3,655		-4,246		-5,420
Primary Income^(a)		21,403		21,553		19,439		26,379		35,186
Secondary Income^(b)		-2,003		-1,370		-2,570		-2,359		-2,475
Capital Account		-211		-413		-207		-423		-114
Financial Account^(c)		20,136		24,862		14,125		16,838		6,492
Assets		-3,279		-9,883		-15,143		-13,266		-44,249
Liabilities		-23,415		-34,745		-29,268		-30,103		-50,741
Net Errors and Omissions		842		6,024		-1,659		-4,276		-4,940

(a)

Primary Income mainly shows balance of payments of interests and dividends from external financial credits and debts and includes such items as receipt and payment of dividends and interests between parent companies and their subsidiaries, receipt and payment of stock dividends and bond interests, and receipt and payment of interests related to loans, borrowings, and deposits.

(b)	Secondary Income shows balance of payments of provision of assets unaccompanied by consideration between residents and non-residents and includes such items as receipt and payment of financial support, donations, and gifts by the government or by the people.

(c)	Positive figures (+) show increases in net assets, negative figures (-) show decreases in net assets in “Financial Account”.

Source: Balance of Payments, Ministry of Finance.

Official Reserves Assets


As of December 31,	Gold^(a)		Foreign Currency Reserves		IMF Reserve Position		SDRs (Special Drawing Rights)		Other Reserve Assets		Total

	(in millions of dollars)
2018	$	31,531	$	1,208,958	$	11,464	$	18,484	$	538	$	1,270,975
2019		37,469		1,255,322		11,202		19,176		581		1,323,750
2020		46,526		1,312,160		15,147		20,215		632		1,394,680
2021		49,505		1,278,925		10,643		62,330		4,347		1,405,750
2022		49,295		1,103,907		10,817		59,275		4,282		1,227,576

(a)	The valuation of gold reflects marked-to-market values.

Source: International Reserves/Foreign Currency Liquidity, Ministry of Finance.

Foreign Exchange Rates

In recent months, the exchange rate for the U.S. dollar against the yen has sharply increased. As of May 15, 2023, the spot buying rate quoted on the Tokyo foreign exchange market as reported by the BOJ at 5:00 p.m., Tokyo time, was ¥135.96 = $1.00, and the noon buying rate on May 12, 2023 for cable transfers in New York City payable in yen, as reported by the Federal Reserve Bank of New York, was ¥135.63 = $1.00.

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Foreign exchange intervention is conducted to influence foreign exchange rates by buying and selling currencies in the foreign exchange market. In Japan, foreign exchange intervention is to be carried out under the authority of the Minister of Finance. The BOJ conducts foreign exchange interventions on behalf of and at the instruction of the minister. When the minister deems it necessary to intervene in the foreign exchange market, the Ministry of Finance gives the BOJ specific instructions for foreign exchange intervention. With respect to funding, as foreign exchange intervention involves buying and selling currencies, it requires funds such as Japanese yen and U.S. dollars. In Japan, the Foreign Exchange Fund Special Account (FEFSA), which falls under the jurisdiction of the Ministry of Finance, is used for foreign exchange intervention.

The total amount of foreign exchange intervention operations by the MOF for the period from August 30, 2022 through October 27, 2022 was ¥9,188.1 billion. Following such operations, Japan’s reserve assets totaled $1,194,568 million as of October 31, 2022, down $97,504 million from the end of August. As of March 31, 2023, Japan’s reserve assets totaled $1,257,061 million.

Foreign Direct Investment

The following table sets forth information regarding annual foreign direct investment in Japan and annual foreign direct investment abroad for the periods indicated.

Foreign direct investment in Japan (by industry)^(a)


	2018		2019		2020		2021		2022

	(in billions of yen)
Manufacturing (total)^(b)	¥	1,188.5	¥	606.7	¥	331.3	¥	1,356.8	¥	1,644.1
Food		9.8		58.2		-43.9		-66.6		3.4
Textile		-4.2		2.7		4.2		6.2		11.5
Lumber and pulp		0.4		2.3		0.9		8.8		2.0
Chemicals and pharmaceuticals		298.6		120.9		135.3		1,471.3		353.3
Petroleum		1.3		-93.7		7.2		5.1		-18.6
Rubber and leather		-0.8		—		-0.6		-0.8		0.1
Glass and ceramics		2.0		-17.3		25.4		-5.1		15.1
Iron, non-ferrous, and metals		7.3		12.1		2.9		10.2		369.9
General machinery		25.7		-53.0		21.0		13.7		73.4
Electric machinery		529.5		327.5		157.6		235.0		504.9
Transportation equipment		180.3		244.0		27.9		-329.3		310.0
Precision machinery		2.7		-10.1		9.4		5.7		6.2
Non-manufacturing (total)^(c)		-88.4		892.8		811.4		1,348.8		2,630.7
Farming and forestry		3.7		0.5		0.3		0.4		0.5
Fishery and marine products		1.7		0.9		1.2		1.1		3.1
Mining		3.3		4.2		1.5		5.4		2.3
Construction		-29.6		20.1		-1.4		9.8		-5.2
Transportation		5.6		23.1		21.1		48.7		730.5
Communications		-384.4		-30.7		13.8		424.6		319.3
Wholesale and retail		-570.4		-680.9		-96.5		-240.3		62.4
Finance and insurance		702.1		1,301.1		743.3		929.7		1,164.9
Real estate		78.9		32.7		-28.9		-76.8		-4.0
Services		10.5		137.8		87.7		61.3		167.5

Total	¥	1,100.1	¥	1,499.5	¥	1,142.8	¥	2,705.7	¥	4,274.8

(a)	Starting with transactions recognized in January 2014, the BOJ began using the Sixth Edition of “Balance of Payments and International Investment Position Manual” (BPM6) released by International Monetary Fund in 2008 to calculate the data provided in this table.

(b)	The total amounts for Manufacturing include other types of manufacturing not separately listed in the table and therefore are different from the sum of listed subcategories of manufacturing.

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(c)	The total amounts for Non-manufacturing include other industries not separately listed in the table and therefore are different from the sum of listed subcategories of Non-manufacturing industries.

Source: Outward / Inward Direct Investment, breakdown by Region and Industry, Ministry of Finance.

Foreign direct investment in Japan (by region)^(a)


	2018		2019		2020		2021		2022

	(in billions of yen)
North America	¥	642.1	¥	1,386.2	¥	318.5	¥	747.3	¥	1,678.8
Asia		-6.6		553.3		535.1		1,899.6		1,409.4
Europe		-125.4		-688.2		334.4		-259.0		516.8
Other regions		590.0		248.0		-45.3		317.8		669.8

Total	¥	1,100.1	¥	1,499.5	¥	1,142.8	¥	2,705.7	¥	4,274.8

(a)	Starting with transactions recognized in January 2014, the BOJ began using the Sixth Edition of “Balance of Payments and International Investment Position Manual” (BPM6) released by International Monetary Fund in 2008 to calculate the data provided in this table.

Source: Outward / Inward Direct Investment, breakdown by Region and Industry, Ministry of Finance.

Foreign direct investment abroad (by industry)^(a)


	2018		2019		2020		2021		2022

	(in billions of yen)
Manufacturing (total)^(b)	¥	6,365.9	¥	11,344.9	¥	1,588.4	¥	4,192.2	¥	6,767.9
Food		65.7		581.9		1,619.7		360.0		321.6
Textile		184.5		70.7		41.7		26.1		65.3
Lumber and pulp		171.9		138.7		255.7		50.8		183.1
Chemicals and pharmaceuticals		1,617.8		4,593.9		-3,449.0		1,101.5		1,258.0
Petroleum		67.7		20.5		25.0		23.0		43.7
Rubber and leather		192.4		213.1		79.9		-46.3		131.0
Glass and ceramics		222.8		233.9		144.0		27.6		226.1
Iron, non-ferrous, and metals		414.1		443.5		197.6		137.5		590.1
General machinery		834.9		714.4		-214.5		601.0		1,150.3
Electric machinery		1,036.2		1,391.7		1,420.5		1,452.8		962.9
Transportation equipment		1,219.6		2,437.3		1,205.8		145.7		1,253.1
Precision machinery		128.7		306.1		122.1		140.2		327.4
Non-manufacturing (total)^(c)		9,643.5		14,013.7		8,626.3		11,917.8		14,465.2
Farming and forestry		8.0		6.2		39.1		35.7		67.0
Fishery and marine products		7.4		3.7		0.3		-5.5		10.3
Mining		1,062.6		1,060.1		267.4		8.6		1,326.1
Construction		258.3		202.5		103.0		82.7		102.9
Transportation		242.4		239.9		122.8		137.5		472.0
Communications		4,179.4		636.0		-2,629.2		937.6		1,540.3
Wholesale and retail		1,508.7		6,311.8		3,709.0		3,517.3		3,895.3
Finance and insurance		2,826.4		4,018.4		5,500.5		5,858.8		4,711.0
Real estate		424.5		1,173.6		215.4		377.7		479.7
Services		-1,456.5		-189.7		610.0		274.3		1,289.0

Total	¥	16,009.4	¥	25,358.6	¥	10,214.7	¥	16,110.0	¥	21,233.0

(a)	Starting with transactions recognized in January 2014, the BOJ began using the Sixth Edition of “Balance of Payments and International Investment Position Manual” (BPM6) released by International Monetary Fund in 2008 to calculate the data provided in this table.

(b)	The total amounts for Manufacturing include other types of manufacturing not separately listed in the table and therefore are different from the sum of listed subcategories of manufacturing.

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(c)	The total amounts for Non-manufacturing include other industries not separately listed in the table and therefore are different from the sum of listed subcategories of Non-manufacturing industries.

Source: Outward / Inward Direct Investment, breakdown by Region and Industry, Ministry of Finance.

Foreign direct investment abroad (by region)^(a)


	2018		2019		2020		2021		2022

	(in billions of yen)
North America	¥	2,192.4	¥	5,551.2	¥	5,916.7	¥	6,609.0	¥	8,172.4
Asia		5,570.2		5,540.7		3,392.5		5,052.9		5,133.0
Europe		5,157.9		11,603.4		-1,705.9		4,180.8		4,596.8
Other regions		3,088.8		2,663.3		2,611.4		267.3		3,330.8

Total	¥	16,009.4	¥	25,358.6	¥	10,214.7	¥	16,110.0	¥	21,233.0

(a)	Starting with transactions recognized in January 2014, the BOJ began using the Sixth Edition of “Balance of Payments and International Investment Position Manual” (BPM6) released by International Monetary Fund in 2008 to calculate the data provided in this table.

Source: Outward / Inward Direct Investment, breakdown by Region and Industry, Ministry of Finance.

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FINANCIAL SYSTEM

The Bank of Japan and Monetary Policy

The Bank of Japan (“BOJ”), with 55% of its capital owned by the government, is the central bank and sole issuing bank, as well as the depository and fiscal agent for the government. As of the end of September 2022, the BOJ had total assets of ¥685,790 billion.

One of the missions of the BOJ is to contribute to the sound development of the national economy, through the pursuit of price stability. In order to fulfill this mission, the BOJ controls the overall volume of money in the economy and through market operations, along with monetary policy decided at the BOJ Policy Board Meeting. From March 2001 to March 2006, in order to fight deflation and revive the Japanese economy, the BOJ implemented a quantitative easing policy by conducting money market operations to adjust the outstanding balance of the current accounts at the BOJ. And in March 2006, the BOJ announced an exit from the quantitative easing policy and a return to monetary policy that targeted policy interest rate (uncollateralized overnight call rate). At the same time, the BOJ decided to encourage the rate to remain at effectively zero percent. Then, the BOJ increased the policy interest rate to 0.25% in July 2006, and to 0.5% in February 2007. From the Fall of 2008, however, when the turmoil in global financial markets intensified, the BOJ implemented various monetary policy measures including reductions in the policy interest rate. It decreased the policy interest rate to 0.3% in October 2008, and further to 0.1% in December 2008. Furthermore, in October 2010, in order to further enhance monetary easing, the BOJ implemented a comprehensive monetary easing policy, which included the establishment of an Asset Purchase Program (APP) to purchase financial assets, including risk assets, as well as to provide loans. Since the APP’s introduction, the BOJ has repeatedly and significantly increased the maximum amount outstanding of the APP, from about ¥35 trillion to about ¥101 trillion at the end of 2013. Moreover, in February 2012, the BOJ decided to pursue powerful monetary easing by conducting its virtually zero interest rate policy and by implementing the APP, with the aim of achieving the goal of 1% in terms of the year-on-year rate of change in the consumer price index (CPI). In order to state clearly the shared understanding concerning the roles of the government and the BOJ, the BOJ decided to release “Measures Aimed at Overcoming Deflation” in October 2012. In January 2013, the BOJ introduced the “price stability target” of 2% in terms of the year-on-year rate of change in the CPI. The BOJ also introduced the “open-ended asset purchasing method”, aimed at achieving this target. It released a joint statement with the government to announce that in order to overcome deflation early and achieve sustainable economic growth with price stability, the government and the BOJ would strengthen their policy coordination and work together. Furthermore, in April 2013, the BOJ introduced a policy of “quantitative and qualitative monetary easing”, aimed at achieving this target at the earliest possible time. In order to do so, under this policy, the BOJ would enter a new phase of monetary easing both in terms of quantity and quality. The BOJ would double the monetary base in two years by conducting money market operations so that the monetary base would increase at an annual pace of about ¥60-70 trillion. The BOJ would also purchase Japanese government bonds (“JGBs”) so that their amount outstanding would increase at an annual pace of about ¥50 trillion, and the average remaining maturity of the BOJ’s JGB purchases would be extended from slightly less than three years at the time to about seven years, which was equivalent to the average maturity of the amount outstanding of JGBs issued. Additionally, the BOJ would purchase exchange-traded funds (“ETFs”) and Japan real estate investment trusts (“J-REITs”) so that their amounts outstanding would increase at an annual pace of about ¥1 trillion and about ¥30 billion, respectively. In October 2014, the BOJ expanded its quantitative and qualitative monetary easing measures to further increase its purchases of JGBs, ETFs and J-REITs to achieve an increase in its purchases of JGBs, ETFs and J-REITs at an annual pace of about ¥80 trillion, ¥3 trillion and ¥90 billion, respectively. In order to maintain momentum towards 2% “price stability target,” in January 2016, the BOJ adopted “quantitative and qualitative monetary easing with a negative interest rate,” under which (i) a negative interest rate of minus 0.1% is applied to a part of BOJ accounts held by financial institutions^(a) (if judged necessary by the BOJ, the rate will be lowered even further), (ii) the BOJ will conduct money market operations so that the monetary base will increase at an annual pace of about ¥80 trillion, and (iii) the BOJ will purchase

^(a)

More specifically, accounts held by financial institutions are divided into three levels referred to as “basic balance” (a positive interest rate of 0.1% is applied), “macro add-on balance” (a zero interest rate is applied), and “policy-rate balance” (a negative interest rate of minus 0.1% is applied). “Policy-rate balance” is the balance in excess of “basic balance” and “macro add-on balance.”

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With regard to asset purchase except for JGB purchases, the BOJ also set the following guidelines: (i) purchase ETFs and J-REITs so that their amounts outstanding will increase at an annual pace of about ¥6 trillion and about ¥90 billion, respectively, and (ii) maintain the amounts outstanding of commercial paper and corporate bonds at about ¥2.2 trillion and about ¥3.2 trillion, respectively. Finally, the BOJ announced its “inflation-overshooting commitment”, under which it will continue with QQE with yield curve control, aiming to achieve the price stability target of 2%, as long as it is necessary for maintaining the target in a stable manner, and will continue to expand the monetary base until the year-on-year rate of increase in the observed CPI (all items less fresh food) exceeds the price stability target of 2% and stays above the target in a stable manner. In July 2018, to maintain strong monetary easing, the BOJ decided to strengthen the framework for continuous strong monetary easing. The BOJ introduced forward guidance for policy rates and announced its intent to maintain the current extremely low levels of short- and long-term interest rates for an extended period of time, taking into account uncertainties regarding economic activity and prices including the effects of the consumption tax hike in October 2019. Also, it was announced that the yields may move upward and downward to some extent mainly depending on developments in economic activity and prices^(b). In addition, with regard to ETFs and J-REIT unit purchases, the BOJ announced that it may increase or decrease the amount of purchases depending on market conditions. Further, in April 2019, to make its policy to persistently continue with strong monetary easing clearer, the BOJ clarified its forward guidance for policy rates: The BOJ intends to maintain the current extremely low levels of short- and long-term interest rates for an extended period of time, taking into account uncertainties regarding economic activity and prices including developments in overseas economies and the effects of the consumption tax hike.

Furthermore, on March 16, 2020, in response to the adverse impact of the global spread of COVID-19 on the Japanese economy, the BOJ announced its plan to further strengthen its monetary easing policy, including (1) ensuring ample supply of yen funding through active purchases of JGBs and the following measures as well as providing U.S. dollar liquidity, (2) the introduction of special operations to support companies under which the BOJ will extend zero-interest rate loans collateralized by corporate debt as well as increasing the upper limit for its purchases of commercial paper and corporate bonds by ¥2 trillion until the end of September 2020, resulting in an upper limit for its balance of outstanding commercial paper and corporate bonds of ¥3.2 trillion and ¥4.2 trillion, respectively and (3) an increase in the upper limit for its purchases of ETFs and J-REITs to ¥12 trillion and ¥180 billion, respectively. On April 27, 2020, given the increasingly severe situation due to impact of the spread of COVID-19, the BOJ decided to further enhance monetary easing through (1) an increase in purchases of commercial paper and corporate bonds, to be conducted through the end of September 2020, setting the maximum amounts of additional purchase to ¥7.5 trillion for each asset, (2) strengthening the BOJ’s Special Funds-Supplying Operations to Facilitate Financing in Response to the Novel Coronavirus (COVID-19), which were introduced and became effective in March 2020, and (3) further active purchases of JGBs and treasury discount bills. On June 18, 2021, the BOJ extended the duration of the Special Program to Support Financing in Response to COVID-19 and the duration of purchase of commercial paper and corporate bonds, with an upper limit on the amount outstanding of about ¥20 trillion in total, until the end of March, 2022. On

^(b)	In case of rapid increases in the yields, the BOJ will purchase JGBs promptly and appropriately.

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December 17, 2021, the BOJ announced that it would further extend the duration of a part of the Special Funds-Supplying Operations to Facilitate Financing in Response to the COVID-19 until September 2022 but plans to gradually decrease the balance of commercial paper and corporate bonds to the pre-pandemic level (approximately ¥2 trillion and ¥3 trillion, respectively).

In statements released on June 17, 2022 and July 21, 2022, the BOJ recognized that the consumer price index (for all items less fresh food) will likely increase at a year-on-year rate of 2% due to rises in energy and food prices for the time being, but it is expected to decelerate thereafter because the positive contribution of the rise in energy prices to the consumer price index is likely to wane. The BOJ also confirmed that it will maintain its monetary easing policy until the year-on-year rate of increase in the consumer price index (for all items less fresh food) exceeds 2% in a stable manner.

Citing increased volatility in overseas financial and capital markets that have significantly affected these markets in Japan, as announced in a statement released on December 20, 2022, the BOJ decided to modify its conduct of yield curve control with respect to Japanese government bonds, with the goal of improving market functioning and encouraging a smoother formation of the entire yield curve, while maintaining accommodative financial conditions. With respect to yield curve control, the BOJ decided to, while significantly increasing the amount of Japanese government bond purchases, expand the range of 10-year Japanese government bond yield fluctuations from the target level of between around plus and minus 0.25 percentage points to between around plus and minus 0.5 percentage points. The BOJ announced that these measures were intended to achieve the price stability target mentioned above by enhancing the sustainability of monetary easing under its monetary easing policy.

The long-term effect of the BOJ’s policies remains unclear. The BOJ’s policies may impact the strength of the Japanese yen relative to the U.S. dollar and other foreign currencies and may inadvertently have a negative effect on the Japanese economy more generally if tighter monetary policies ultimately result in decreased economic activity.

The following table sets forth the principal economic indicators relating to monetary policy from 2018 through 2022.


							Loans and Bills Discounts Domestically
	Current Account Balances^(a)		Monetary Base				Money Stock				Licensed Banks
	Current Account Balances^(a)		Total^(a)		Annual % Change		Total^(a)		Annual % Change		Total^(a)		Annual % Change

	(yen amounts in billions)
2018		382,178		491,499		7.3		1,002,456		2.9		488,331		2.8
2019		396,404		509,008		3.6		1,026,190		2.4		500,517		2.5
2020		438,051		555,229		9.0		1,092,598		6.5		524,164		4.7
2021		521,752		643,496		16.2		1,162,665		6.5		536,911		2.4
2022		528,008		653,203		1.6		1,201,202		3.3		550,559		2.5

(a)	Average amounts outstanding.

Source: Bank of Japan Statistics, Bank of Japan.

Private Financial Institutions

According to the Financial Services Agency, as of January 4, 2023, the private banking system included four city banks, 13 trust banks, and 17 other banks, as well as 62 1st local banks as of May 1, 2021, 37 2nd local banks as of May 1, 2021 and the Saitama Resona Bank, which is categorized as neither a 1st nor 2nd local bank. In addition, 56 foreign banks had branches in Japan as of November 21, 2022.

There are also credit associations, credit cooperative associations, labor credit associations and the national federations of each of such associations, which are engaged mainly in making small business loans. Agricultural cooperatives, prefectural credit federations of such cooperatives and The Norinchukin Bank operate in the field of agricultural credit.

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GOVERNMENT FINANCE

Revenues, Expenditures and Budgets

The responsibility for the preparation of the budget and the administration of government finances rests with the Ministry of Finance. The fiscal year commences on April 1, and the Cabinet usually submits the budget to the Diet for its decision in the preceding January. Supplementary budgets revising the original budget may be submitted to the Diet from time to time during the fiscal year.

For advancing fiscal consolidation, the Cabinet approved the “Basic Framework for Fiscal Consolidation: Medium-term Fiscal Plan” on August 8, 2013. This plan provided the following targets for achieving fiscal consolidation.

•

Halving the primary deficit of the national and local governments to GDP ratio by JFY 2015 from the ratio in JFY 2010 (This target has been achieved.);

•

Achieving a primary surplus of the national and local governments to GDP ratio by JFY 2020; and

•

Steadily reducing the public debt to GDP ratio.

These targets were firmly maintained in the “Basic Policies for the Economic and Fiscal Management and Reform 2015” decided by the Cabinet on June 30, 2015, including “The Plan to Advance Economic and Fiscal Consolidation”, or the fiscal consolidation plan, which the government believes would be an effective and concrete plan for achieving the primary surplus target by JFY2020, covering a five-year period (JFY2016-JFY2020). Under the fiscal consolidation plan, the government was committed to assessing the progress of reforming expenditure and revenue measures by using several benchmarks. However, the actual improvement in the primary balance was slower than the estimate under the “Plan to Advance Economic and Fiscal Revitalization”, or the Revitalization Plan, owing to more moderate growth in tax revenue than the initial assumption due to a decline in economic growth, as well as the impact of the postponement of the consumption tax rate hike to 10% from 8%, and the addition of supplementary budgets. Furthermore, in the “New Economic Policy Package”, the government revised the purposes of use of the tax revenue generated from the consumption tax rate hike in October 2019 to ensure stable fiscal resources in preparation for the human resources development revolution. Due to these factors, it was not possible to achieve the primary surplus target by JFY2020.

Given the changing population structure including as a result of the aging population and decreasing working population, it is necessary to strengthen the basis for the social security system by the time the baby-boomer generation starts reaching 75 years of age and to ensure establishment of a path for fiscal consolidation by the time every member of the baby-boomer generation reaches 75 years of age. From these viewpoints, the new fiscal consolidation targets were set in the “Basic Policy on Economic and Fiscal Management and Reform 2018” by the Cabinet on June 15, 2018, which aims for a primary surplus of the central and local governments by JFY2025 by steadily implementing economic revitalization and fiscal consolidation measures. At the same time, the government will firmly maintain its aim of steadily reducing the public debt to GDP ratio.

In order to achieve the primary surplus target, the government will implement steadily the expenditure reforms on all fronts in parallel with economic revitalization.

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tourism, transportation, food services and entertainment as well as regional economic development, (iv) measures to develop a resilient economic structure including support for development of business supply chains, support for agricultural exports and domestic supply and promotion of digital technologies in education and business and (v) securing contingency funds to address COVID-19. On December 8, 2020, the Prime Minister of Japan at the time, SUGA Yoshihide, announced Comprehensive Economic Measures to Secure People`s Lives and Livelihoods toward Relief and Hope, including (i) containment measures for COVID-19 pandemic, (ii) measures to promote economic structural change and positive cycles for Post-Corona era, (iii) measures to secure safety and relief, including disaster prevention and mitigation and promotion of national land toughening and (iv) proper and timely implementation of the contingency funds for measures against COVID-19. In connection with these measures, the Diet approved three supplementary budgets for JFY 2020 in April and June 2020 and January 2021. The total expenditures from the general account increased to ¥175.7 trillion with these supplementary budgets. The expenditures increases in the supplementary budgets were largely financed through issuance of government bonds.

The fiscal and financial operations of the government and its agencies are budgeted and recorded in the following three sets of accounts:

•

General Account. The general account is used primarily to record operations in basic areas of governmental activity.

•

Special Accounts. The accounts of the central government consist of the general account and special accounts. Special accounts can be set up to carry out specific projects, to manage specific funds, and for other purposes. Special accounts can be set up when the government (i) implements a specific program such as insurance and public works, (ii) possesses and manages special funds such as Fiscal Loan Program Funds and Foreign Exchange Funds, and (iii) uses a certain revenue to secure a special expenditure and thus needs to deal with such revenue and expenditure on a separate basis from the general revenue and expenditure such as Local Allocation and Local Transfer Tax and Government Bonds Consolidation Funds. As of September 2022, the government had 13 special accounts.

•

Government-Affiliated Agencies. The government-affiliated agencies are government-owned corporations which consist of three financial corporations.

The settlement of accounts for revenues and expenditures is made by the Ministry of Finance, based on reports submitted by the respective Ministers. The settlement of accounts is required by law to be audited annually in detail by the Board of Audit, an organ independent of the Cabinet, and submitted by the Cabinet to the Diet in the following fiscal year.

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The following tables set forth information with respect to the General Account, the Special Accounts and the Government Affiliated Agencies for JFY 2017 through JFY 2022, and the initial budget for JFY 2023.

Summary of Consolidated General and Special Accounts^(a)


	JFY 2017		JFY 2018		JFY 2019		JFY 2020		JFY 2021		JFY 2022 (Provisional results as of December 31, 2022)		JFY 2023 Initial Budget

	(in billions of yen)
REVENUES
Total Revenues, General Account	¥	103,644	¥	105,697	¥	109,162	¥	184,579	¥	169,403	¥	161,716	¥	114,381
Total Revenues, Special Accounts		386,487		381,177		386,552		417,561		455,554		458,196		444,598
Less: Inter-Account Transactions^(b)		245,402		243,007		244,423		248,863		302,306		300,275		305,484

Total Consolidated Revenues	¥	244,729	¥	243,868	¥	251,292	¥	353,277	¥	322,651	¥	319,637	¥	253,495


EXPENDITURES
Total Expenditures, General Account	¥	98,116	¥	98,975	¥	101,366	¥	147,597	¥	144,650	¥	160,517	¥	114,381
Total Expenditures, Special Accounts		374,150		368,936		374,170		404,519		441,081		448,384		441,909
Less: Inter-Account Transactions^(b)		242,877		241,249		242,631		246,270		300,383		298,849		302,647

Total Consolidated Expenditures	¥	229,389	¥	226,661	¥	232,905	¥	305,846	¥	285,348	¥	310,052	¥	253,643

Surplus of Consolidated Revenues over Consolidated Expenditures	¥	15,340	¥	17,206	¥	18,387	¥	47,431	¥	37,303	¥	9,584	¥	(148	)

(a)	Because of the manner in which the government accounts are kept, it is not practicable to show a consolidation of the Government Affiliated Agencies with the General and Special Accounts.

(b)	Inter-Account Transactions include transfers between the General Account and the Special Accounts, transfers between the Special Accounts, and transfers between sub- accounts of the Special Accounts.

Source: Budget, Ministry of Finance.

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General Account


	JFY 2017		JFY 2018		JFY 2019		JFY 2020		JFY 2021		JFY 2022 Revised Budget^(a)		JFY 2023 Initial Budget

	(in billions of yen)
REVENUES
Tax and Stamp Revenues	¥	58,787	¥	60,356	¥	58,442	¥	60,822	¥	67,038	¥	68,359	¥	69,440
Carried-over Surplus		5,232		5,528		6,723		7,796		36,981		2,326		—
Government Bond Issues		33,555		34,395		36,582		108,554		57,655		62,479		35,623
Income from Operations		50		51		51		46		61		51		51
Gains from Deposition of Assets		278		268		226		293		319		306		671
Miscellaneous Receipts		5,741		5,098		7,139		7,068		7,349		5,698		8,597

Total Revenues	¥	103,644	¥	105,697	¥	109,162	¥	184,579	¥	169,403	¥	139,220	¥	114,381

EXPENDITURES
Local Allocation Tax Grants, etc.	¥	15,567	¥	16,026	¥	16,032	¥	16,256	¥	19,558	¥	17,513	¥	16,399
National Debt Service		22,521		22,529		22,286		22,326		24,589		24,072		25,250
Social Security		32,521		32,569		33,501		42,998		50,161		40,939		36,889
Public Works		6,912		6,913		7,610		8,413		8,600		8,053		6,060
Education and Science		5,703		5,748		5,911		9,194		7,956		8,813		5,416
National Defense		5,274		5,475		5,627		5,505		6,014		5,810		10,169
Former Military Personnel Pensions		286		241		202		169		140		122		97
Economic Assistance		651		642		653		763		669		847		511
Food Supply		1,181		1,122		1,121		1,498		1,772		1,761		1,265
Energy		969		973		1,049		1,027		1,267		2,197		854
Promotion of SMEs		319		525		779		16,257		9,944		1,419		170
Miscellaneous		6,211		6,212		6,596		23,190		13,980		15,913		5,800
Contingency funds for measures against the COVID-19 and soaring crude oil and commodity prices		—		—		—		—		—		9,860		4,000
Contingency funds for Economic Emergency including the impact from the Ukraine crisis		—		—		—		—		—		1,000		1,000
Contingencies		—		—		—		—		—		900		500

Total Expenditures	¥	98,116	¥	98,975	¥	101,366	¥	147,597	¥	144,650	¥	139,220	¥	114,381

Surplus of Revenues over Expenditures	¥	5,528	¥	6,723	¥	7,796	¥	36,981	¥	24,754	¥	—	¥	—

(a)	As of the date of this Supplement, details for the provisional results for JFY 2022 General Accounts are not available. Reflects the revised budget for JFY 2022 approved by the Diet on December 2, 2022.

Source: Budget, Ministry of Finance.

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Special Accounts


	JFY 2017				JFY 2018				JFY 2019				JFY 2020				JFY 2021				JFY 2022 Revised Budget^(a)				JFY 2023 Initial Budget
	Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.
	(in billions of yen)
Fiscal Investment and Loan Program	¥	28,207	¥	27,409	¥	26,070	¥	25,175	¥	28,484	¥	27,873	¥	52,366	¥	51,967	¥	35,860	¥	35,346	¥	36,064	¥	36,027	¥	24,988	¥	24,937
Government Bonds Consolidation Fund		191,227		188,134		186,158		183,082		186,970		183,878		188,973		185,921		239,702		236,623		237,174		237,174		239,474		239,474
Foreign Exchange Fund		2,808		70		3,101		85		3,599		160		3,133		234		2,475		177		2,491		1,147		2,988		2,419
Local Allocation and Local Transfer Tax		52,517		51,780		52,483		51,596		51,985		51,488		51,978		50,829		55,326		53,632		53,436		51,966		51,177		49,544
Measure for Energy		10,191		9,742		10,613		10,158		10,887		10,377		11,155		10,618		11,649		10,914		14,053		14,053		14,059		14,059
Pensions		90,158		87,413		91,700		89,464		93,209		90,919		94,591		91,804		96,376		92,725		97,045		97,045		99,506		99,506
Stable Supply of Foodstuff		979		842		970		814		968		851		926		821		980		913		1,316		1,314		1,531		1,528
Debt Management of National Forest and Field Service		342		342		349		349		356		356		363		363		360		360		353		353		344		344
Automobile Safety		625		431		672		451		684		500		651		434		559		395		520		449		522		456
Labor Insurance		6,040		5,656		6,073		5,735		6,371		5,928		10,589		9,519		10,486		8,610		8,855		8,034		8,952		8,657
Reconstruction from the Great East Japan Earthquake		2,924		2,188		2,532		1,868		2,587		1,677		2,498		1,854		1,430		1,112		922		922		730		730
Others		469		143		456		158		452		164		338		153		353		273		300		264		327		254

Total Revenues and Expenditures^(b)	¥	386,487	¥	374,150	¥	381,177	¥	368,936	¥	386,552	¥	374,170	¥	417,561	¥	404,519	¥	455,554	¥	441,081	¥	452,529	¥	448,751	¥	444,598	¥	441,909

(a)	As of the date of this Supplement, details for the provisional results for JFY 2022 Special Accounts are not available. Reflects the revised budget for JFY 2022 approved by the Diet on December 2, 2022.

(b)	Without adjustment for inter-account transactions. Total Revenues and Expenditures may differ from the actual totals of the listed accounts due to rounding.

Source: Budget, Ministry of Finance.

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Government Affiliated Agencies


	JFY 2017				JFY 2018				JFY 2019				JFY 2020				JFY 2021				JFY 2022 Initial Budget^(a)				JFY 2023 Initial Budget
	Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.
	(in billions of yen)
Total	¥	1,130	¥	962	¥	1,231	¥	1,064	¥	1,265	¥	1,064	¥	1,096	¥	804	¥	996	¥	665	¥	2,005	¥	2,519	¥	2,234	¥	2,646

(a)

There were no revisions to the relevant information for Government Affiliated Agencies in the first and second revised budgets for JFY 2022 approved by the Diet on May 31, 2022 and December 2, 2022, respectively. As of the date of this Supplement, details for the provisional results for JFY 2022 General Accounts are not available.

Source: Budget, Ministry of Finance

Tax Structure

The central government derives tax revenues (including stamp revenues) through taxes on income, consumption and property, etc. The taxes on income, consumption and property (including stamp revenues, etc.) account for 53.7%, 41.2% and 5.0%, respectively, of the total central government taxes and stamp revenues in the JFY 2023 initial national budget.

The individual national income tax is progressive, with rates currently ranging from 5% to 45% of taxable income, and the local taxes are a 10% single rate. Interest income is generally taxed at the rate of 20.315%, including both national and local taxes, separately from other types of income, and subject to certain exemptions. The statutory national corporate income tax rate was reduced from 23.4% in JFY 2016 to 23.2% in JFY 2018, except that, for small and medium corporations, the first ¥8 million of income is taxed at 15%. In addition, corporations are subject to local income taxation. The effective corporate income tax rate (national and local) was reduced from 29.97% in JFY 2016 to 29.74% in JFY 2018.

Comprehensive Reform of Social Security and Tax. Japan’s fiscal conditions face challenges, with its tax revenues covering about 61% of its expenditures under the initial budget for JFY 2023, and with the ratio of long-term debt outstanding of central and local governments to gross domestic product having reached 219% at the end of JFY 2021. The ratio of long-term debt outstanding of central and local governments to gross domestic product is expected to be increased to 224% at the end of JFY 2022 and JFY 2023. Such ratio may further increase in subsequent fiscal years due to the negative impact of COVID-19 on gross domestic product and additional government debt issued in connection with stimulus measures implemented in response to COVID-19. See also “Japan’s Public Debt” below. The Government of Japan seeks to tackle these fiscal challenges through the “comprehensive reform of social security and tax”, which was approved by the Diet in August 2012, and thereby maintain the market’s and the international community’s confidence in Japan and build the foundation for stable economic growth. In the reform, the government planned to set aside consumption tax revenues for social security payments, and, on the condition that the economic situation improves, gradually increase the consumption tax rate to 8% in April 2014 and to 10% in October 2015. In accordance with the plan, the consumption tax rate was increased to 8% in April 2014. However, the government decided to postpone the implementation date of the further consumption tax hike to 10% from October 1, 2015 to April 1, 2017, as a result of taking comprehensive account of the economic condition and other factors, and on June 1, 2016, the then current Japan Prime Minister, ABE Shinzo announced a plan to further postpone the consumption tax hike to 10% from April 1, 2017, to October 1, 2019. The consumption tax rate has been increased to 10% since October 1, 2019.

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JAPAN’S PUBLIC DEBT

The following table summarizes, as of the dates indicated, the outstanding direct internal and external funded and floating debt of Japan. The term “floating debt” is used herein to mean all debt with maturities of one year or less from the date of issue. All other debt is classified as “funded debt.” Detailed debt tables are presented below.

Outstanding General Bonds are expected to reached ¥1,068 trillion at the end of JFY 2023. The amount of public bonds issued by the Japanese government as a percentage of its general account total revenues was 44.9% under the revised budget for JFY 2022 (reflecting the first and second supplementary budgets approved on May 31, 2022 and December 2, 2022, respectively) and 31.1% under the initial budget for JFY 2023 (reflecting the first and second supplementary budgets approved on May 31, 2022 and December 2, 2022, respectively). The amount of the government bond issuances in the JFY 2023 initial budget is ¥35,623 billion and is less than the JFY 2022 revised budget level of ¥62,479 billion.

Summary of Japan’s Public Debt


At the end of JFY	Funded				Floating Internal
At the end of JFY	Internal		External		Floating Internal
	(in billions of yen)		(in thousands of yen)		(in billions of yen)
2017		934,321		—		153,492
2018		954,863		—		148,491
2019		965,926		—		148,614
2020		993,542		—		222,921
2021		1,037,735		—		203,572

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USE OF PROCEEDS

JICA estimates the net proceeds from the sale of the bonds will be approximately $1,243,293,563.

JICA intends to use the net proceeds from the sale of the bonds to finance newly committed or ongoing Eligible Projects of Sustainability Bonds as defined under the Framework.

JICA has created the Framework based on the 2021 edition of the Social Bond Principles, the 2021 edition of the Green Bond Principles and the 2021 edition of the Sustainability Bond Guidelines, each established by the International Capital Markets Association.

Eligible Projects

JICA intends to allocate the amount equivalent to the net proceeds of the bonds to finance newly committed or ongoing Finance and Investment Cooperation projects that JICA assists in developing countries and regions. Finance and Investment Cooperation is composed of ODA Loans and Private-Sector Investment Finance. ODA Loans are sovereign loans and have concessional lending terms and conditions and are extended to governments or government entities of developing countries. Private-Sector Investment Finance provides loans or equity investments for projects in developing countries undertaken by private enterprises. Finance and Investment Cooperation aims to promote sustainable development of developing countries and regions through development of fundamental infrastructure such as energy, roads and railways; development of indispensable social services such as safe water, wastewater and waste management, education, healthcare; agriculture and rural development to reduce poverty and strengthen sustainable food systems; industrial development and fostering small and medium-sized enterprises to support employment generation and economic growth; addressing climate change; sustainable management of natural resources and environment; disaster prevention and recovery; promotion of gender equality and women’s empowerment; and support of peacebuilding. All Finance and Investment Cooperation projects contribute to resolving social issues, and some of the projects also address environmental issues. Therefore, JICA intends to allocate the net proceeds from the sale of the bonds for Finance and Investment Cooperation projects composed of (i) projects which contribute to resolving social issues and (ii) projects which contribute to resolving both social and environmental issues.

The following is an outline of Eligible Projects:

•

Agriculture, forestry and fisheries—Includes projects such as support for agricultural production facilities and irrigation systems, agricultural technical guidance based on meteorological and geographical conditions, marine resource conservation and sustainable fishery, forest preservation and promotion of agroforestry, etc. JICA believes that projects under this sector will contribute to resolving both social and environmental issues.

•

Healthcare—Includes projects such as support for healthcare facilities and equipment, training and capacity building of healthcare workers and other required measures to improve healthcare in the project country, etc.

•

Education—Includes project such as support for educational facilities and equipment, development of curricula and teaching materials, international scholarships and other measures needed to improve education in the project country.

•

Improvement of access to finance for women—Includes projects such as improvement of access to finance for women and women entrepreneurs of small and medium-sized enterprises.

•

Water supply, sewerage and sanitation—Includes projects such as support for water supply and sewerage, water treatment plants, sewage treatment plants and waste treatment facilities including compost, etc. JICA believes that projects under this sector, excluding desalination, will contribute to resolving both social and environmental issues.

•

Energy—Includes projects such as support for renewable power generation and transmission facilities, other types of power generation and transmission facilities (excluding coal-fired thermal power plants), improvement of energy efficiency or other required measures to improve access to energy in the

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project country. Among projects categorized in this sector, JICA believes that renewable energy (solar, wind, geothermal and hydropower excluding largescale) projects and energy efficiency projects will contribute to resolving both social and environmental issues.

•

Small and medium-sized enterprises/industrial development—Includes projects such as two-step loans for small and medium-sized enterprises and support for development of local industries and employment generation, etc.

•

Transportation—Includes projects such as support for development of roads, bridges, airports, seaport infrastructure (including rehabilitation and restoration) and other measures to improve transportation infrastructure in the project country.

•

Public transportation—Includes projects such as support for metros/railways and other public transportation and other required measures to improve public transportation in the project country. Among projects categorized in this sector, JICA believes that electrified public transportation projects will contribute to resolving both social and environmental issues.

•

Housing financial support for low-income class—Includes projects such as housing financial support for low-income class.

•

Comprehensive basic infrastructure development and post-disaster reconstruction—Includes projects such as support for basic infrastructure for development or redevelopment of cities, rural villages and regions (including small scale infrastructure such as roads or housing), projects for recovery/reconstruction from major natural disasters such as earthquakes and other comprehensive support needed to improve the general living situation in the project country.

•

Flood control—Includes projects such as support for river basin improvement and dredging and warning systems for flood control. JICA believes that projects under this sector will contribute to resolving both social and environmental issues.

•

Communication, broadcast—Includes projects such as support for communication network infrastructure or broadcasting facilities and other measures to improve communication and broadcasting in the project country.

•

Comprehensive environmental conservation—Includes projects such as support for comprehensive environmental conservation, such as climate change mitigation, air or water pollution control, waste management and other support for comprehensive environmental conservation. JICA believes that projects under this sector will contribute to resolving both social and environmental issues.

•

Peace building—Includes projects such as support for projects that contribute to building resilient states and societies with the goal of realizing peaceful and just societies in developing countries affected by violent conflicts.

Exclusionary Criteria

JICA commits to not knowingly allocate the net proceeds of the bonds to finance activities related to coal-fired thermal power projects.

Project Evaluation and Selection Process

Application of Eligibility Criteria in project selection

JICA’s project evaluation follows the DAC evaluation criteria, which provide an international ODA evaluation perspective as defined by the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD). JICA assess effectiveness and impact from both quantitative and qualitative perspectives in order to determine social and environmental effects. During the project selection stage, JICA discusses with the Japanese government and external experts who provide their review of the prospective projects. In addition, all ODA loans undergo approval by the Japanese Cabinet before loan agreements are signed.

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During the project appraisal and selection stage, JICA makes assessments from the perspective of environmental and social considerations to identify any negative environmental and social impacts caused by the project and incorporate countermeasures in the project scope.

Monitoring of Selected Projects

All Eligible Projects are to be subject to periodic monitoring during the entire lifecycle of the financing until the projects are completed.

Procedure for Confirmation of Environmental and Social Considerations

JICA examines and confirms that environmental and social considerations are put into practice by the project proponents in accordance with the “JICA Guidelines for Environmental and Social Considerations” at each project stage, including formulation, review, implementation and post-implementation.

These guidelines set forth the procedures, criteria, and requirements that projects financed by JICA must meet in confirming environmental and social considerations. When JICA determines that the project proponents have not made appropriate environmental and social considerations, JICA will encourage them to take remedial measures.

Prospective projects are screened prior to funding and classified into four categories according to the degree of potential environmental or social impact. An environmental review is then conducted to verify that the environmental and social impacts have been considered in a proper manner. After funding has been approved, projects are monitored to assess the actual impact.

Management of the proceeds

The funds raised by us from the sale of the bonds will be allocated to Eligible Projects. JICA’s Treasury, Finance and Accounting Department will track and monitor the amount of the bonds issued under the Framework to be allocated to Eligible Projects. In addition, until the full amount of the proceeds are allocated to Eligible Projects, JICA will maintain the unallocated proceeds as cash or cash equivalents.

Reporting

JICA will report the allocation and impact of the bonds on an annual basis until the net proceeds are fully allocated to Eligible Projects. In case of material events, JICA will disclose information in a timely manner.

Allocation Report

JICA will produce allocation reports disclosing the following information:

•

the amount of net proceeds allocated to Eligible Projects, and remaining balance if any;

•

the allocated amount for each Eligible Project category; and

•

the ratio of new/refinanced projects.

Impact Report

JICA will publish impact reports on the social and environmental contribution of Eligible Projects to the extent practically possible.

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Further Information

JICA has obtained a second party opinion from Moody’s Investors Service regarding the alignment of the Framework with the 2021 edition of the Social Bond Principles, the 2021 edition of the Green Bond Principles and the 2021 edition of the Sustainability Bond Guidelines, each established by the International Capital Market Association.

Neither the Framework, the second party opinion nor any report concerning the compliance review is incorporated by reference into this prospectus supplement, the accompanying prospectus or any other filing with the SEC. The Framework may be updated from time to time, including in response to further advances and developments in the Social Bond Principles, the Green Bond Principles, the Sustainability Bond Guidelines or other applicable industry or government guidelines establishing best practices for the sustainability bond market.

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DESCRIPTION OF THE BONDS AND GUARANTEE

The following terms of the bonds and the guarantee of Japan supplement the description of the general terms of our debt securities under “Description of the Debt Securities and Guarantee” in the SEC Base Prospectus. For more information, you should refer to the fiscal agency agreement relating to the bonds, a copy of the form of which is to be filed as an exhibit to an amendment to the JICA 18-K 2022, on May 17, 2023.

General

The bonds will be issued pursuant to a fiscal agency agreement, dated as of May 16, 2023 (New York City time)/May 17, 2023 (Tokyo time), among us, Japan, MUFG Bank, Ltd., London Branch, as fiscal agent, principal paying agent and transfer agent and U.S. Bank Trust Company, National Association, as U.S. representative of the fiscal agent, principal paying agent and transfer agent. The aggregate principal amount of the bonds will be $1,250,000,000. The bonds will mature at par on May 23, 2028.

The bonds will bear interest at the rate per year shown on the front cover of this Supplement, payable in equal semi-annual installments, accruing from May 23, 2023. The interest payment dates are May 23 and November 23, commencing November 23, 2023. Interest will be payable to the person in whose name the bond is registered at 6:00 p.m., New York City time generally on the fifteenth day before the interest payment occurs. Interest in respect of any bond shall be calculated per $2,000 in principal amount of the bonds. Whenever it is necessary to compute any amount of interest in respect of the bonds, that interest will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

If a date for payment of principal or interest on the bonds falls on a day that is not a business day, the related payment of principal, premium, if any, or interest may be made on the next succeeding business day as if made on the date the payment was due and no interest will accrue in respect of such delay. For purposes of this paragraph, “business day” means any day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in: (a) the relevant place of payment and (b) The City of New York, London and Tokyo.

Other than as described below under “—Redemption”, we may not redeem the bonds prior to maturity. The bonds will not be subject to a sinking fund.

Japan unconditionally and irrevocably guarantees the payment of principal of, interest on, and any additional amounts of, the bonds.

The bonds will be our direct, unsecured debt securities obligations and rank pari passu and be payable without any preference among themselves and at least equally with all of our other unsecured debt securities obligations from time to time outstanding, which rank senior to our unsecured general obligations not represented by debt securities, provided, however, that certain obligations in respect of national and local taxes and certain preferential rights granted by, among others, the Japanese Civil Code to certain specified types of creditors, such as preferential rights of employees to wages, will have preference.

Additional terms of the bonds and the guarantee of Japan are described in the SEC Base Prospectus under “Description of the Debt Securities and Guarantee”.

MUFG Bank, Ltd., London Branch has its principal corporate office at Ropemaker Place, 25 Ropemaker Street, London EC2Y 9AN. Under the fiscal agency agreement, the fiscal agent will act in part through its U.S. representative, U.S. Bank Trust Company, National Association, which has an office at 100 Wall St STE 600, New York, NY 10005. In acting as the fiscal agent for the bonds, MUFG Bank, Ltd., London Branch (or its U.S. representative, as applicable), is the agent of JICA and Japan, is not a trustee or agent for the holders of the bonds and does not have the same responsibilities or duties to act for such holders as would a trustee or agent. We may maintain deposit accounts and conduct other banking transactions in the ordinary course of business with the fiscal agent.

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Acceleration of Maturity

This section supersedes the description in the SEC Base Prospectus under the heading “Description of the Debt Securities and Guarantee—Acceleration of Maturity”.

In case of the following types of default, the principal amount of a bond will become due and payable at the option of the registered holder of such bond upon the registered holder’s written notice to the fiscal agent, unless all defaults shall have been cured prior to the receipt of such notice by the fiscal agent:

•

Default in any payment, when due, of principal or interest on any of the bonds, and continuance of such default for a period of 30 days; or

•

Default in the performance by us of any other covenant contained in the bonds, and the continuance of such default for a period of 90 days after written notice thereof to us from the registered holder of the bond is received by the fiscal agent.

The fiscal agency agreement does not require us to furnish to the fiscal agent periodic evidence as to the absence of default.

Additional Amounts

We will pay all amounts that we are required to pay on the bonds without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of Japan, or any taxing authority in Japan (“Taxes”), unless the withholding or deduction of such Taxes is required by law. In that event, we will pay such additional amounts that are necessary so that the net amounts received by any beneficial owner of the bonds after such withholding or deduction will equal the amounts that would have been receivable in the absence of such withholding or deduction.

We will not, however, be obligated to pay any additional amounts:

•

to, or to a third party on behalf of, any beneficial owner of a bond that is an individual non-resident of Japan or a non-Japanese corporation and is liable for such Taxes in respect of this bond by reason of such beneficial owner’s (a) having some connection with Japan other than the mere holding of, or the enforcement of its rights under, this bond or (b) being a Specially-Related Party of JICA; or

•

to, or to a third party on behalf of, any beneficial owner of a bond that would otherwise be exempt from any such withholding or deduction but that fails to comply with any applicable requirement to provide interest recipient information or to submit a written application for tax exemption to the relevant fiscal agent, or whose interest recipient information is not duly communicated through the Participant (as defined below) and the relevant international clearing organization to such fiscal agent; or

•

to, or to a third party on behalf of, any beneficial owner of a bond that is for Japanese tax purposes treated as an individual resident of Japan or a Japanese corporation, except for

•

a “designated financial institution” that complies with the requirement to provide the interest recipient information or to submit a written application for tax exemption and

•

an individual resident of Japan or a Japanese corporation that duly notifies the fiscal agent of its status as not being subject to Taxes to be withheld or deducted by reason of such resident or Japanese corporation receiving interest on the bond through a payment handling agent in Japan appointed by it; or

•

more than 30 days after the Relevant Date, except to the extent that any beneficial owner of a bond would have been entitled to additional amounts for payment at the expiration of such 30-day period. By “Relevant Date” we mean the date on which such payment first becomes due, except that, if the amount of the moneys payable has not been received by the fiscal agent on or prior to that due date, “Relevant Date” means the date, after the full amount of such moneys are received, on which notice is duly published as described below under “—Redemption”.

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Where a bond is held through a participant of an international clearing organization or a financial intermediary, each of which we refer to as a “Participant”, in order to receive payments free of withholding or deduction for, or on account of, any Taxes, if the beneficial owner of the bond is

•

an individual non-resident of Japan or a non-Japanese corporation (other than a Specially-Related Party of JICA) or

•

a Japanese financial institution falling under certain categories prescribed by the Act on Special Measures Concerning Taxation of Japan, and the Cabinet Order, which we refer to as a “designated financial institution”,

that beneficial owner must, at the time it entrusts a Participant with the custody of the bond, provide certain “interest recipient information” prescribed by the Act on Special Measures Concerning Taxation of Japan to enable the Participant to establish that the beneficial owner is exempted from the requirement for Taxes to be withheld or deducted, and advise the Participant if that beneficial owner ceases to be so exempted (including the case where the beneficial owner who is an individual non-resident of Japan or a non-Japanese corporation became a Specially-Related Party of JICA).

Where a bond is not held by a Participant, in order to receive payments free of withholding or deduction for, or on account of, any Taxes, if the beneficial owner is

•

an individual non-resident of Japan or a non-Japanese corporation (other than a Specially-Related Party of JICA) or

•

a designated financial institution,

that beneficial owner must, prior to each time it receives interest, submit to the fiscal agent a written application for tax exemption (Hikazei Tekiyo Shinkokusho) in the form obtainable from the fiscal agent. The written application for tax exemption must state, among other things,

•

the name and address (and, if applicable, the Japanese individual or corporation ID number) of the beneficial owner,

•

the title of the bond,

•

the relevant interest payment date,

•

the amount of interest and

•

the fact that the beneficial owner is qualified to submit the written application for tax exemption, together with the documentary evidence regarding its identity and residence.

Redemption

We may redeem all, but not less than all, of the bonds if (i):

•

there is any change in or amendment to the laws or treaties, or any regulations or rulings promulgated under the laws or treaties, of Japan or any political subdivision or taxing authority of Japan or

•

there is any change in official position regarding the application or interpretation of these laws, treaties, regulations or rulings, including a holding, judgment or order by a court of competent jurisdiction,

which change, amendment, application or interpretation becomes effective on or after the date we issued the bonds and causes us to pay any additional amounts, as described above under “—Additional Amounts”, and (ii) we cannot avoid the obligation to make such payments by taking reasonable measures available to us.

Before we can redeem the bonds, we must:

•

give the holders of the bonds at least thirty (30) days’ notice and not more than sixty (60) days’ notice in the manner described in “—Notices” below and

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•

deliver to the fiscal agent a legal opinion of our counsel or an opinion of a tax consultant confirming that the conditions that must be satisfied for redemption have occurred.

The redemption price for each bond will be equal to 100% of the principal amount of the bond plus accrued interest to the date of redemption and any additional amounts we are required to pay, as described above under “—Additional Amounts”, and will be payable to the person in whose name the bond is registered at 6:00 p.m., New York City time on the fifteenth day before the redemption occurs.

Form, Denominations and Registration

All bonds will be in registered form, without interest coupons attached. Bonds held outside the United States, referred to as the international bonds, will be represented by beneficial interests in the international global bond, in fully registered permanent global form without interest coupons attached, which will be registered in the name of the nominee of the common depositary for, and in respect of interests held through, Euroclear and Clearstream. A beneficial interest in the international global bond may at all times be held only through Euroclear and Clearstream.

Bonds held within the United States, referred to as the DTC bonds, will be represented by beneficial interests in one or more DTC global bonds, in fully registered permanent global form without interest coupons attached, which will be registered in the name of Cede & Co., as nominee for DTC, and which will be deposited on or about May 23, 2023 with U.S. Bank Trust Company, National Association, as custodian for DTC. In the event there is more than one DTC global bond, they shall collectively be referred to as the DTC global bond.

The international global bond has been assigned a Common Code number of 262461009 and an ISIN number of XS2624610098. The DTC global bond has been assigned a Common Code number of 262493890, an ISIN number of US47109LAG95 and a CUSIP number of 47109L AG9.

Beneficial interests in the global bonds will be represented, and transfers will be effected, through accounts of financial institutions acting on behalf of beneficial owners as direct and indirect participants in DTC, Euroclear or Clearstream. Such beneficial interests will be in denominations of $200,000 and integral multiples of $2,000 in excess thereof. You may hold bonds directly through DTC, Euroclear or Clearstream, if you are a participant in these systems, or indirectly through organizations that are participants in such systems. Euroclear and Clearstream hold securities on behalf of their participants through customers’ securities accounts in their respective names on the books at their respective depositaries, which in turn can hold such securities in customers’ securities accounts in the depositaries’ names on the books of DTC.

Persons who are not DTC, Euroclear, or Clearstream participants may beneficially own bonds held by DTC and the nominee of the common depositary for Euroclear and Clearstream only through direct or indirect participants in DTC, Euroclear, or Clearstream. So long as Cede & Co., as the nominee of DTC, and the nominee of the common depositary for Euroclear and Clearstream are the registered owners of the global bonds, Cede & Co. and the nominee of the common depositary for Euroclear and Clearstream for all purposes will be considered the sole holders of the bonds under the fiscal agency agreement and the bonds. Except as provided below, owners of beneficial interests in the global bonds will not be entitled to have bonds registered in their names, will not receive or be entitled to receive physical delivery of bonds in definitive form and will not be considered the holders thereof under the fiscal agency agreement or the bonds. Once we and the fiscal agent make payments to the registered holder, we and the fiscal agent will no longer be liable on the bonds for the amount so paid. Accordingly, any person owning a beneficial interest in the global bonds must rely on the procedures of DTC, Euroclear or Clearstream, and, if such person is not a participant in DTC, Euroclear, or Clearstream, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder of bonds. We understand that, under existing industry practice, in the event that any owner of a beneficial interest in the DTC global bonds desires to take any action that Cede & Co., as the holder of the global bonds, is entitled to take, Cede & Co. would authorize the participants to take such action, and the participants would authorize

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beneficial owners owning through such participants to take such action or would otherwise act upon the instructions of beneficial owners owning through them.

DTC may grant proxies or authorize its DTC participants, or persons holding beneficial interests in the bonds through such DTC participants, to exercise any rights of a holder or take any actions that a holder is entitled to take under the fiscal agency agreement or the U.S. dollar-denominated bonds.

The fiscal agent will not charge you any fees for the bonds, other than reasonable fees and indemnity satisfactory to the fiscal agent for the replacement of lost, stolen, mutilated or destroyed bonds. However, you may incur fees for the maintenance and operation of the book-entry accounts with the clearing systems in which your beneficial interests are held.

Payment

Owners of beneficial interests in the global bonds will receive all payment in U.S. dollars.

Payment of principal and interest on the global bonds will be made to DTC and the common depositary for Euroclear and Clearstream, or the nominee thereof, as the case may be, as the registered owner of the global bonds.

Upon receipt of any payment of principal of or interest on the global bonds, DTC will credit its participants’ accounts with payment in amounts proportionate to their respective beneficial interests in the principal amount of the global bonds as shown on the records of DTC. Payments by DTC participants to owners of beneficial interests in the global bonds held through such participants will be the responsibility of such participants, as is now the case with securities held for the accounts of customers registered in “street name”. Payments by DTC participants to owners of beneficial interests in the global bonds held through such participants will be governed by standing instructions and customary practices.

Distributions with respect to bonds held through Euroclear or Clearstream will be credited to the cash accounts of Euroclear participants or Clearstream participants in accordance with the relevant system’s rules and procedures, to the extent received by its depositary.

Neither we nor the fiscal agent will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the global bonds or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

If a date for payment of principal or interest on the bonds falls on a day that is not a business day, then the related payment of principal, premium, if any, or interest may be made on the next succeeding business day as if made on the date the payment was due and no interest will accrue in respect of such delay. For purposes of this paragraph, “business day” means any day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in: (a) the relevant place of payment and (b) The City of New York, London and Tokyo.

Further Issues

We may from time to time, without notice to or the consent of the registered holders of the bonds, create and issue further bonds ranking pari passu with the bonds in all respects, or in all respects except for

•

the payment of interest accruing prior to the issue date of any further bonds or

•

the first payment of interest following the issue date of any further bonds,

so that those further bonds would be consolidated and form a single series with the bonds and would have the same terms as to status, redemption or otherwise as the bonds. Any further bonds will be issued subject to a supplement to the fiscal agency agreement.

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Prescription

Bonds will become void unless surrendered for payment within a period of ten years from the date on which the payment in respect thereof first becomes due or, if the full amount of the money has not been received by the fiscal agent on or prior to such due date, the date on which the full amount of such money having been so received, notice to that effect shall have been given to the holders.

Meeting of Bondholders

The fiscal agency agreement does not contain provisions for convening meetings of holders of the bonds.

Exchange of Interests in Global Bonds for Bond Certificates

Except in the limited circumstances described below, owners of beneficial interests in the global bonds will not be entitled to have bonds registered in their names, will not receive or be entitled to receive physical delivery of bond certificates in definitive registered form and will not be considered owners or holders thereof under the fiscal agency agreement.

Registration of title to DTC bonds initially represented by the DTC global bond in a name other than DTC or successor depositary or one of their respective nominees will not be permitted unless such depositary notifies us that it is no longer willing or able to discharge properly its responsibilities as depositary with respect to the DTC global bond or ceases to be a “clearing agency” registered under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), or is at any time no longer eligible to act as such, and we are unable to locate a qualified successor within 90 days of receiving notice of such ineligibility on the part of such depositary, in which case notice will be given as described below in “—Notices”.

Registration of title to international bonds initially represented by the international global bond in a name other than the common depositary for Euroclear and Clearstream will not be accepted unless Euroclear or Clearstream is closed for business for a continuous period of 14 days (other than by reason of legal holidays) or announces an intention permanently to cease business, in which case notice will be given as described below in “—Notices”.

We may also at any time and in our sole discretion determine not to have any of the bonds represented by the global bonds. In such event, we will issue or cause to be issued bonds in definitive registered form in exchange for the bonds represented by the global bonds. Such bonds issued in definitive registered form will be issued only in fully registered form, without coupons, in denominations of $200,000 and integral multiples of $2,000 in excess thereof. Any bonds so issued will be registered in such names, and in such denominations, as DTC, Euroclear or Clearstream, as the case may be, shall request. Such bonds may be presented for registration of transfer or exchange at the office of the fiscal agent or one of its agents in the City of New York or London, and principal thereof and interest thereon will be payable at such office of the fiscal agent, provided that interest thereon may be paid to the registered holders of the definitive registered bonds as described below. Exchange of the global bonds for definitive registered bonds will be made free of charge for the bondholders.

Distribution of principal of and interest on any definitive registered bonds will be made by the fiscal agent directly to registered holders of the definitive registered bonds in accordance with the procedures described in this Supplement and in the fiscal agency agreement. Interest payments and any principal payments on each payment date will be made to holders of the definitive registered bonds in whose names the definitive registered bonds were registered at the close of business on the related record date. Distributions will be made by wire transfer or by check mailed to the addresses of such holders as they appear on the register maintained by the fiscal agent. The final payment on any definitive registered bond, however, will be made only upon presentation and surrender of such definitive registered bond at the office of the fiscal agent on a payment date that is a business day in the place of presentation. The fiscal agent will provide notice to registered holders mailed not later than fifteen (15) days before such final distribution.

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Definitive registered bonds will be transferable and exchangeable at the offices of the fiscal agent or at the offices of our other agents in the City of New York or London. No service charge will be imposed for any registration of transfer or exchange, but the fiscal agent may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection with the transfer or exchange. Neither the fiscal agent nor any transfer agent will be required to (a) exchange or register the transfer of any definitive registered bonds selected for redemption, or (b) exchange or register the transfer of definitive registered bonds for the period from the record date preceding the due date for any payment to the payment date with respect to such definitive registered bonds.

Notices

All notices will be published in a daily newspaper in English of general circulation in London (expected to be the Financial Times) and in New York City (expected to be The Wall Street Journal), provided that for so long as any bonds are represented by the global bond, notices may be given by delivery of the relevant notice to DTC, Euroclear and Clearstream, for communication by them to their respective participants in substitution for publication in any such newspaper. If at any time publication in any such newspaper is not practicable, notices will be valid if published in an English language newspaper selected by us with general circulation in the respective market regions. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once on different dates, on the first date on which publication is made.

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GLOBAL CLEARANCE AND SETTLEMENT

Although DTC, Euroclear and Clearstream have agreed to the procedures provided below in order to facilitate transfers of bonds among their participants, they are under no obligation to perform these procedures and they may modify or discontinue these procedures at any time. None of JICA, Japan, the fiscal agent, any paying agent, any underwriter or any affiliate of any of the above, or any person by whom any of the above is controlled for the purposes of the United States Securities Act of 1933, as amended (the “Securities Act”), will have any responsibility for the performance by DTC, Euroclear and Clearstream or their respective direct or indirect participants or accountholders of their respective obligations under the rules and procedures governing their operations or for the sufficiency for any purpose of the agreements described below.

DTC, Euroclear and Clearstream have advised as follows:

The Clearing Systems

DTC

DTC is:

•

a limited purpose trust company organized under the laws of the State of New York;

•

a member of the Federal Reserve System;

•

a “clearing corporation” within the meaning of the Uniform Commercial Code; and

•

a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act.

DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. DTC participants include:

•

Euroclear and Clearstream;

•

securities brokers and dealers;

•

banks;

•

trust companies; and

•

clearing corporations.

DTC participants also may include certain other organizations such as the underwriters. Indirect access to the DTC system also is available to indirect DTC participants such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly.

Because DTC can act only on behalf of DTC participants, who in turn act on behalf of indirect DTC participants and certain banks, the ability of an owner of a beneficial interest in the global bonds to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest, may be limited by the lack of a definitive certificate for such interest. The laws of some jurisdictions require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer beneficial interests in the global bonds to such persons may be limited. In addition, beneficial owners of bonds through the DTC system will receive distributions of principal and interest on the bonds only through DTC participants.

Euroclear and Clearstream

Euroclear and Clearstream hold securities for participating organizations and facilitate the clearance and settlement of securities transactions between their respective participants through electronic book-entry changes

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in accounts of such participants. Euroclear and Clearstream provide to their participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Euroclear and Clearstream interface with domestic securities markets. Euroclear and Clearstream participants are financial institutions such as underwriters, securities brokers and dealers, banks, trust companies and certain other organizations and include certain of the underwriters. Indirect access to Euroclear or Clearstream is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Euroclear or Clearstream participant, either directly or indirectly.

Initial Settlement

Secondary Market Trading

Because the purchaser determines the place of delivery, it is important to establish at the time of trading of any bonds where both the purchaser’s and seller’s accounts are located to ensure that settlement can be made on the desired value date.

Trading between DTC participants

Secondary market sales of book-entry interests in the DTC bonds between DTC participants will occur in the ordinary way in accordance with DTC rules and will be settled using the procedures applicable to United States corporate debt obligations if payment is effected in U.S. dollars, or free of payment if payment is not effected in U.S. dollars. Where payment is not effected in U.S. dollars, separate payment arrangements outside DTC are required to be made between the DTC participants.

Trading between Euroclear and/or Clearstream participants

Secondary market sales of book-entry interests in the bonds held through Euroclear or Clearstream to purchasers of book-entry interests in the international bonds through Euroclear or Clearstream will be conducted in accordance with the normal rules and operating procedures of Euroclear and Clearstream and will be settled using the procedures applicable to conventional eurobonds in registered form.

Trading between DTC seller and Euroclear or Clearstream purchaser

When book-entry interests in bonds are to be transferred from the account of a DTC participant holding a beneficial interest in a DTC global bond to the account of a Euroclear or Clearstream accountholder wishing to purchase a beneficial interest in an international global bond, the DTC participant will deliver instructions for delivery to the relevant Euroclear or Clearstream accountholder to DTC by 12:00 noon, New York City time, on the settlement date. Separate payment arrangements are required to be made between the DTC participant and the relevant Euroclear or Clearstream accountholder. On the settlement date, the custodian, U.S. Bank Trust Company, National Association, will instruct the fiscal agent to:

•

decrease the amount of bonds registered in the name of Cede & Co. and evidenced by the DTC global bonds; and

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•

increase the amount of bonds registered in the name of the nominee of the common depositary for Euroclear and Clearstream, and evidenced by the international global bond. Book-entry interests will be delivered free of payment to Euroclear or Clearstream as the case may be, for credit to the relevant accountholder on the first business day following the settlement date.

Trading between Euroclear or Clearstream seller and DTC purchaser

When book-entry interests in the bonds are to be transferred from the account of a Euroclear or Clearstream accountholder to the account of a DTC participant wishing to purchase a beneficial interest in the DTC global bond, the Euroclear or Clearstream participant must send to Euroclear or Clearstream delivery free of payment instructions by 7:45 p.m., Luxembourg time, one business day prior to the settlement date. Euroclear or Clearstream, as the case may be, will in turn transmit appropriate instructions to the common depositary for Euroclear and Clearstream and the fiscal agent to arrange delivery to the DTC participant on the settlement date. Separate payment arrangements are required to be made between the DTC participant and the relevant Euroclear or Clearstream accountholder, as the case may be. On the settlement date, the common depositary for Euroclear and Clearstream will:

•

transmit appropriate instructions to the custodian, U.S. Bank Trust Company, National Association, who will in turn deliver such book-entry interests in the bonds free of payment to the relevant account of the DTC participants; and

•

instruct the fiscal agent to:

•

decrease the amount of bonds registered in the name of the nominee of the common depositary for Euroclear and Clearstream, and evidenced by the international global bond; and

•

increase the amount of bonds registered in the name of Cede & Co. and evidenced by the DTC global bond.

So long as the international global bond is held on behalf of Euroclear and Clearstream or on behalf of any other clearing system, referred to as an alternative clearing system, notices to holders of bonds represented by a beneficial interest in the international global bond may be given by delivery of the relevant notice to Euroclear, Clearstream or the alternative clearing system, as the case may be, and so long as the DTC global bond is held on behalf of DTC, or an alternative clearing system, notices to holders of bonds represented by a beneficial interest in the DTC global bond may be given by delivery of the relevant notice to DTC or the alternative clearing system, as the case may be.

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TAXATION

Additional United States Taxation Considerations

This section supplements and to the extent inconsistent, supersedes the description in the SEC Base Prospectus under “Taxation—U.S. Taxation” of the material United States federal income tax consequences of owning the bonds we are offering, and is subject to the limitations and exceptions set forth therein.

Please consult your own tax advisor concerning the consequences of owning these bonds in your particular circumstances under the U.S. Internal Revenue Code and the laws of any other taxing jurisdiction.

Foreign Tax Credits

Interest paid by JICA on the Debt Securities is income from sources outside the United States subject to the rules regarding the foreign tax credit allowable to a United States holder and, depending on your circumstances, will be “passive”, “general” or “foreign branch” income for purposes of computing foreign tax credits.

Foreign Account Tax Compliance Act

We do not expect the provisions of the U.S. Internal Revenue Code and U.S. Treasury regulations thereunder commonly known as “FATCA” to apply to the bonds we are offering.

Backup Withholding and Information Reporting

If you are a non-corporate United States holder, information reporting requirements, on Internal Revenue Service Form 1099, generally will apply to:

•

payments of principal and interest on a Debt Security within the United States, including payments made by wire transfer from outside the United States to an account you maintain in the United States, and

•

the payment of proceeds from the sale of a Debt Security effected at a United States office of a broker.

Additionally, backup withholding will apply to such payments if you are a noncorporate United States holder that:

•

fails to provide an accurate taxpayer identification number,

•

is notified by the Internal Revenue Service that you have failed to report all interest and dividends required to be shown on your federal income tax returns, or

•

in certain circumstances, fails to comply with applicable certification requirements.

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UNDERWRITING

Subject to the terms and conditions set forth in the underwriting agreement which we entered into on May 16, 2023 (New York City time)/May 17, 2023 (Tokyo time), we have agreed to sell to each of the underwriters named below, and each of the underwriters, for whom Daiwa Capital Markets Europe Limited, Barclays Bank PLC, Citigroup Global Markets Limited and Morgan Stanley & Co. International plc are acting as representatives, has severally agreed to purchase, the principal amount of bonds set forth opposite its name below:


Underwriter	Principal Amount Bonds
Daiwa Capital Markets Europe Limited	$	400,000,000
Barclays Bank PLC		287,500,000
Citigroup Global Markets Limited		287,500,000
Morgan Stanley & Co. International plc		275,000,000

Total	$	1,250,000,000

The underwriters are obligated to purchase all of the bonds if they purchase any of the bonds.

The underwriters are offering the bonds, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the bonds, and other conditions contained in the underwriting agreement, such as the receipt by the underwriters of officers’ certificates and legal opinions. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

The underwriters propose to offer the bonds directly to the public at the price set forth on the cover page of this Supplement. After the bonds are released for sale to the public, the offering price and other selling terms may from time to time be varied by the representatives.

We are offering the bonds for sale only in those jurisdictions in the United States, Canada, Europe and Asia other than Japan (subject to certain exceptions) where it is legal to make such offers.

Certain of the underwriters have agreed to act through their respective U.S. affiliate or other U.S. broker-dealer when offering the bonds for sale in the United States.

The bonds have not been and will not be registered under the Financial Instruments and Exchange Act of Japan and are subject to the Act on Special Measures Concerning Taxation of Japan. Each underwriter has represented and agreed that, (I) it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell any bonds in Japan, or to any person resident in Japan for Japanese securities law purposes (including any corporation or entity organized under the laws of Japan), except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act of Japan and any other applicable laws, regulations and ministerial guidelines of Japan; and, (II) it has not offered or sold, and will not offer or sell as part of its initial distribution at any time, any of the bonds to, or for the benefit of, any person other than a beneficial owner that is, (i) for Japanese tax purposes, neither (a) an individual resident of Japan or a Japanese corporation, nor (b) an individual non-resident of Japan or a non-Japanese corporation that in either case is a Specially-Related Party of JICA as described in Article 6, Paragraph (4) of the Act on Special Measures Concerning Taxation of Japan or (ii) a Japanese financial institution, designated in Article 6, Paragraph (11) of the Act on Special Measures Concerning Taxation of Japan.

Each of the underwriters has represented and agreed that the bonds subscribed by it will be subscribed by it as principal.

The bonds will not be offered, sold or delivered, directly or indirectly, and neither this Supplement, the SEC Base Prospectus, nor any other offering material relating to the bonds will be distributed, in or from any

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jurisdiction outside the United States except under the circumstances that will result in compliance with applicable laws and regulations.

Each underwriter has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any bonds in circumstances in which section 21(1) of the FSMA does not apply to JICA or Japan; and each underwriter has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the bonds in, from or otherwise involving the United Kingdom.

The bonds may not be offered, sold or otherwise made available to, and will not be offered, sold or otherwise made available to, any retail investor in the EEA. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; (ii) a customer within the meaning of the IDD”), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in the Prospectus Regulation. Consequently no key information document required by the PRIIPs Regulation for offering or selling the bonds or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the bonds or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation

The bonds may not be offered, sold or otherwise made available to, and will not be offered, sold or otherwise made available to, any retail investor in the United Kingdom. For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (8) of Article 2 of Regulation (EU) No 2017/565, as it forms part of domestic law by virtue of the EUWA; (ii) a customer within the meaning of the provisions of the FSMA and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014, as it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129, as it forms part of domestic law by virtue of the EUWA. Consequently no key information document required by the UK PRIIPs Regulation for offering or selling the bonds or otherwise making them available to retail investors in the United Kingdom has been prepared and therefore offering or selling the bonds or otherwise making them available to any retail investor in the United Kingdom may be unlawful under the UK PRIIPs Regulation.

This Supplement and the SEC Base Prospectus have not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Supplement and the SEC Base Prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the bonds may not be circulated or distributed, nor may the bonds be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor (as defined in Section 4A of the Securities and Futures Act 2001 of Singapore (the “SFA”)) pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA and (where applicable) Regulation 3 of the Securities and Futures (Classes of Investors) Regulations 2018, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the bonds are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a)

a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b)

a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

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securities or securities-based derivatives contracts (each term as defined in Section 2 (1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the bonds pursuant to an offer made under Section 275 of the SFA, except:

(1)

to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(c)(ii) of the SFA;

(2)

where no consideration is or will be given for the transfer;

(3)

where the transfer is by operation of law;

(4)

as specified in Section 276(7) of the SFA; or

(5)

as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018 of Singapore.

Any reference to the SFA is a reference to the Securities and Futures Act 2001 of Singapore and a reference to any term as defined in the SFA or any provision in the SFA is a reference to that term as modified or amended from time to time including by such of its subsidiary legislation as may be applicable at the relevant time.

Section 309B Notification: The bonds are prescribed capital markets products (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

The bonds are a new issue of securities with no established trading market. We have been advised by the representatives of the underwriters that the representatives intend to make a market in the bonds but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the bonds. If an active public trading market for the bonds does not develop, the market price and liquidity of the bonds may be adversely affected.

In connection with the offering, the underwriters may purchase and sell the bonds in the open market. These transactions may include short sales, purchases to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater principal amount of bonds than it is required to purchase in the offering. The underwriters may close out any short position by purchasing bonds in the open market. A short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the bonds in the open market prior to the completion of the offering. Purchases to cover a short position and stabilizing transactions may have the effect of preventing or slowing a decline in the market price of the bonds. Additionally, these purchases, along with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the bonds. As a result, the price of the bonds may be higher than the price that might otherwise exist in the open market. These transactions may be effected in the over-the-counter market or otherwise. Neither JICA nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the bonds. In addition, neither we nor any of the underwriters make any representation that the underwriters will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

Our expenses in connection with this offering are estimated to be approximately $493,937 which include our reimbursement of certain of the underwriters’ expenses in connection with this offering, which are estimated to be approximately $227,433.

We and Japan have agreed severally to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, and to contribute to payments the underwriters may be required to make in respect of certain liabilities.

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Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with JICA, Japan or their affiliates. JICA may engage in a hedging transaction directly or indirectly with one or more of the underwriters in connection with the bonds offered hereby. The underwriters have received, or may in the future receive, customary fees and commissions for these transactions.

In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers.

Such investments and securities activities may involve securities and/or instruments of JICA, Japan or their affiliates. Certain of the underwriters or their affiliates that have a lending relationship with JICA or Japan routinely hedge their credit exposure to JICA or Japan consistent with their customary risk management policies. Typically, such underwriters and their affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in our securities, including potentially the bonds offered hereby. Any such short positions could adversely affect future trading prices of the bonds offered hereby. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Delivery of the bonds will be made on or about May 23, 2023, which is the 5th business day following the date of the prospectus supplement filed on May 16, 2023 (this settlement cycle being referred to as “T+5”). Under Rule 15c6-1 of the Commission under the Exchange Act, trades in the secondary market generally are required to settle in two (2) business days, unless the parties to that trade expressly agree otherwise. Accordingly, purchasers who wish to trade bonds prior to the settlement date may be required, by virtue of the fact that the bonds initially will settle in T+5, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement and should consult their own advisor.

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VALIDITY OF SECURITIES

Anderson Mori & Tomotsune will pass upon the validity of the bonds and the guarantee of such bonds, and all other matters of Japanese law and procedure on behalf of JICA and Japan. Morrison & Foerster LLP will pass upon the validity of the bonds and the guarantee of such bonds on behalf of the underwriters as to New York law. In giving their opinions, Morrison & Foerster LLP may rely as to all matters of Japanese law and procedure on the opinion of Anderson Mori & Tomotsune, and Anderson Mori & Tomotsune may rely as to matters of New York law upon the opinion of Morrison & Foerster LLP.

AUTHORIZED AGENTS IN THE UNITED STATES

The authorized agent in the United States for JICA, for purposes of the United States Securities Act of 1933, as amended, is SHIMOKAWA Takao, whose address is: JICA USA Office, 1776 I Street, N.W., Suite 895, Washington, D.C. 20006. The authorized agents for Japan are YOSHIDA Takeshi, located at Ministry of Finance, Consulate General of Japan in New York, 299 Park Avenue,¹8th Floor, New York, NY 10171 and YAMAMOTO Yosuke, located at Embassy of Japan, 2520 Massachusetts Avenue, N.W., Washington, D.C. 20008.

EXPERTS

The financial statements of the general account and the finance and investment account of JICA appearing in JICA’s Annual Reports (Form 18-K) for the years ended March 31, 2021 and 2022, have been audited by Ernst & Young ShinNihon LLC, independent auditor, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such financial statements are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing.

S-75

GENERAL INFORMATION

Approval in principle has been received for the listing and quotation of the bonds on the SGX-ST. For so long as the bonds are listed on the SGX-ST and the rules of the SGX-ST so require, in the event that the global certificate for the international global bonds or, as the case may be, the DTC global bonds is exchanged for definitive certificates, we will appoint and maintain a paying agent in Singapore, where the definitive certificates in respect of the bonds may be presented or surrendered for payment or redemption. In addition, in the event that the global certificate for the international global bonds or, as the case may be, the DTC global bonds is exchanged for definitive certificates, an announcement of such exchange will be made by or on behalf of JICA through the SGX-ST and such announcement will include all material information with respect to the delivery of the definitive certificates, including details of the paying agent in Singapore.

Except as disclosed in “Summary Financial Information” on pages S-22 to S-25 of this Supplement, there has been no significant change in our financial position since March 31, 2022, the date of the most recent published English language financial statements of JICA.

Except as disclosed in “Recent Developments” on pages S-16 to S-55 of this Supplement, there has been no significant change in Japan’s public finance and trade data since March 31, 2022.

On May 17, 2023 (Tokyo time), the Minister of Finance of Japan or the Minister of Finance ad interim of Japan is expected to consent to give Japan’s guarantee with respect to the bonds, upon our application dated May 17, 2023.

The issue of the bonds was authorized by the President of JICA on May 16, 2023.

The bonds have been accepted for clearance through DTC, Euroclear and Clearstream. (Common Code for international global bond: 262461009; Common Code for DTC global bond: 262493890; CUSIP: 47109L AG9; ISIN for international global bond: XS2624610098; ISIN for DTC global bond: US47109LAG95). The address of DTC is 55 Water Street, New York, N.Y., 10041. The address of Euroclear is 1 Boulevard du Roi Albert II, B-1210 Brussels, Belgium. The address of Clearstream is 42 Avenue JF Kennedy, L-1855 Luxembourg.

We are not and have not been involved in any governmental, legal, or arbitration proceedings (including any such proceedings which are pending or threatened, of which we are aware) during the 12 months preceding the date of this Supplement which may have, or have had in the recent past, significant effects on JICA’s financial position.

Japan is not and has not been involved in any governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which Japan is aware) during the 12 months preceding the date of this Supplement which may have, or have had in the recent past, significant effects on Japan’s financial position.

The contact address and telephone number for JICA for the purposes of this Supplement is Budget for Finance and Investment Account, and Capital Markets Division, Treasury, Finance and Accounting Department, JICA, Nibancho Center Building 5-25, Niban-cho, Chiyoda-ku, Tokyo 102-8012, Japan, telephone: 81-3-5226-9279.

The contact address and telephone number for Japan for the purposes of this Supplement is Market Finance Division, Financial Bureau, Ministry of Finance, 3-1-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8940, Japan, telephone: 81-3-3581-4111.

The Commission maintains an Internet site (http://www.sec.gov) that contains reports and other information regarding issuers that file electronically with the Commission. Our Internet site is http://www.jica.go.jp. The information on the website is not incorporated by reference into this Supplement or the SEC Base Prospectus.

S-76

The names of JICA’s executive officers and auditors are as follows:


President
TANAKA Akihiko

Executive Senior Vice President
YAMADA Junichi

Senior Vice Presidents
YOKOYAMA Tadashi
NAKAZAWA Keiichiro
SHIBATA Hironori
ONODERA Seiichi
IMOTO Sachiko
ANDO Naoki
MIYAZAKI Katsura
IKURA Yoshinobu

Auditors
SANO Keiko
SEKIGUCHI Noriko
AKAHANE Takeshi

All of the officers are engaged by JICA on a full-time basis.

Where information in this Supplement has been sourced from third parties, this information has been accurately reproduced and as far as we are aware and able to ascertain from information published by such third parties, no facts have been omitted which would render the reproduced information inaccurate or misleading. The source of third party information is identified where used. We take responsibility for the correct reproduction and extraction of such third party information.

Copies of the final form of the fiscal agency agreement and the guarantee will be available, so long as any bonds are outstanding, for inspection at the specified offices of the fiscal agent in London.

The bonds will bear the following legends:

Interest payments on this security will generally be subject to Japanese withholding tax unless it is established that the security is held by or for the account of a beneficial owner that is (i) for Japanese tax purposes, neither (x) an individual resident of Japan or a Japanese corporation, nor (y) an individual non-resident of Japan or a non-Japanese corporation that in either case is a person having a special relationship with JICA as described in Article 6, Paragraph (4) of the Act on Special Measures Concerning Taxation of Japan (a “Specially-Related Party of JICA”), (ii) a designated Japanese financial institution described in Article 6, Paragraph (11) of the Act on Special Measures Concerning Taxation of Japan which complies with the requirement for tax exemption under that paragraph, or (iii) a public corporation, a financial institution or a financial instruments business operator, etc. described in Article 3-3, Paragraph (6) of the Act on Special Measures Concerning Taxation of Japan which complies with the requirement for tax exemption under that paragraph.

Interest payments on this security to an individual resident of Japan, to a Japanese corporation (except as described in the preceding paragraph), or to an individual non-resident of Japan or a non-Japanese corporation that in either case is a Specially-Related Party of JICA will be subject to deduction in respect of Japanese income tax at a rate of currently 15.315 per centum of the amount of such interest.

S-77

P R O S P E C T U S

LOGO

Japan International Cooperation Agency

(Issuer)

Japan

(Guarantor)

$2,000,000,000

Debt Securities

Japan International Cooperation Agency (“JICA”) may offer any combination of debt securities from time to time in one or more offerings. JICA will provide specific terms of these securities in supplements to this prospectus. You should read this prospectus and any prospectus supplement carefully before you invest. This prospectus may not be used to make offers or sales of securities unless accompanied by a prospectus supplement.

Neither the United States Securities and Exchange Commission (the “Commission”) nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

The date of this Prospectus is March 7, 2023.

Table of Contents


	Page
ABOUT THIS PROSPECTUS		iii
FORWARD-LOOKING STATEMENTS		iii
WHERE YOU CAN FIND MORE INFORMATION		1
JAPAN INTERNATIONAL COOPERATION AGENCY		2
JAPAN		6
USE OF PROCEEDS		51
DESCRIPTION OF THE DEBT SECURITIES AND GUARANTEE		52
TAXATION		55
PLAN OF DISTRIBUTION		61
AUTHORIZED AGENTS IN THE UNITED STATES		61
VALIDITY OF THE DEBT SECURITIES		61
EXPERTS		62
FURTHER INFORMATION		62

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that JICA and Japan filed with the Commission, under the U.S. Securities Act of 1933, as amended, utilizing a “shelf” registration process. Under this shelf registration process, JICA may sell any combination of the debt securities described in this prospectus (“Debt Securities”) in one or more offerings up to the total dollar amount registered with the Commission (or the equivalent in other currencies).

This prospectus provides a general description of the Debt Securities that JICA may offer. Each time JICA sells securities under this shelf registration process, JICA will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. Before you invest, you should read both this prospectus and any prospectus supplement together with additional information described under the heading “Where You Can Find More Information”.

Issuance of any guarantee by Japan of any Debt Securities will be subject to limits imposed by annual budgetary authorizations set by the Japanese Diet. In addition, each particular issue of Debt Securities will require authorization by Japan of any guarantee of such Debt Securities on a case-by-case basis.

A portion of the securities offered hereby may be offered and sold outside of the United States in transactions not subject to the registration requirements of the U.S. Securities Act of 1933, as amended.

None of JICA, Japan or the underwriters of the Debt Securities to which any particular prospectus supplement relates has authorized any dealer, salesman or other person to give any information or to make any representation not contained in this prospectus or such a prospectus supplement. If any such dealer, salesman or other person has given or made such information or representation, you must not rely upon such information or representation as having been authorized by JICA, Japan or such underwriters. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the Debt Securities in any jurisdiction to any person to whom it is unlawful to make such offer in such jurisdiction.

FORWARD-LOOKING STATEMENTS

This prospectus and any prospectus supplement and documents incorporated by reference in this prospectus and any prospectus supplement may contain forward-looking statements. Statements that are not historical facts, including statements about JICA’s beliefs and expectations, are forward-looking statements. Forward-looking statements speak only as of the date they are made, and JICA undertakes no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties and actual results may differ materially from those contained in any forward-looking statements.

iii

WHERE YOU CAN FIND MORE INFORMATION

JICA and Japan have filed, or will file, annual reports, amendments to annual reports and other information with the Commission. These reports and amendments include certain financial, statistical and other information about JICA and Japan, and may be accompanied by exhibits. You may read and copy any document JICA and Japan file with the Commission at the Commission’s public reference at 100 F Street, N.E., Washington, D.C. 20549. Please call the Commission at 1-800-SEC-0330 for further information on the public reference room. In addition, the Commission maintains an Internet site (www.sec.gov) that contains reports and other information regarding issuers that file electronically with the Commission.

The Commission allows JICA and Japan to “incorporate by reference” the information JICA and Japan file with the Commission, which means that JICA and Japan can disclose important information to you by referring you to those documents. Information that is incorporated by reference is an important part of this prospectus. JICA and Japan incorporate by reference the documents listed below and any future filings made with the Commission to the extent such filings indicate that they are intended to be incorporated by reference:

•

JICA’s annual report on Form 18-K for the fiscal year ended March 31, 2022, filed on September 27, 2022.

•

Exhibit 2 to JICA’s annual report on Form 18-K for the fiscal year ended March 31, 2021, filed on September 27, 2021.

Each time JICA or Japan files a document with the Commission that is incorporated by reference, the information in that document automatically updates the information contained in previously filed documents.

You should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. JICA and Japan have not authorized anyone else to provide you with different or additional information. JICA and Japan are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the dates set forth on the respective cover pages of these documents.

You may request a copy of the annual reports, amendments to annual reports and other information mentioned above by writing or calling JICA. Written requests for such documents should be directed to Japan International Cooperation Agency, Nibancho Center Building 5-25, Niban-cho, Chiyoda-ku, Tokyo 102-8012, Japan, Attention: JICA Headquarters, Japan. JICA’s telephone number is 81-3-5226-9279. The Internet site of JICA is http://www.jica.go.jp. The information on the website is not incorporated by reference into this prospectus.

In this document all amounts are expressed in Japanese Yen (“¥” or “yen”), except as otherwise specified. The spot buying rate quoted on the Tokyo foreign exchange market on February 10, 2023 as reported by the Bank of Japan at 5:00 p.m., Tokyo time, was ¥130.45 = $1.00, and the noon buying rate on February 3, 2023 for cable transfers in New York City payable in yen, as reported by the Federal Reserve Bank of New York, was ¥131.07 = $1.00.

References herein to Japanese fiscal years (“JFYs”) are to 12-month periods commencing in each case on April 1 of the year indicated and ending on March 31 of the following year.

JAPAN INTERNATIONAL COOPERATION AGENCY

The following information should be read in conjunction with the information included in JICA’s annual report on Form 18-K for the fiscal year ended March 31, 2022 and any future periodic reports and amendments filed by JICA with the Commission.

Overview

JICA is an incorporated administrative agency established in October 2003 pursuant to the Act on General Rules for Incorporated Administrative Agencies and the Act of the Incorporated Administrative Agency—Japan International Cooperation Agency (the “JICA Act”). JICA’s main objective is to contribute to the promotion of international cooperation as well as the sound development of the Japanese and global economy by supporting the socioeconomic development, recovery or economic stability of developing regions. Following an overhaul in October 2008 (see “—History”), JICA is currently the sole implementing agency for all major Japanese Official Development Assistance (“ODA”) schemes, which are separated into three categories—Technical Cooperation, Grant Aid and Finance and Investment.

JICA is entirely owned by the Japanese government and is subject to control and supervision by the Minister for Foreign Affairs of Japan and the Minister of Finance of Japan. As of March 31, 2022, government investment by Japan contributed to ¥8,249 billion of net assets on the balance sheet of JICA’s Finance and Investment Account and the capital ratio, calculated as total net assets divided by total assets, was 70.99 %.

History

JICA’s origins can be traced back to January 1954, with the establishment of the Federation of Japan Overseas Associations. In subsequent years, the Society for Economic Cooperation in Asia, Japan Emigration Promotion, Co., Ltd., Overseas Technical Cooperation Agency, Japan Emigration Service and Japan Overseas Cooperation Volunteers were established, each with the objective of fostering international cooperation. JICA was originally established in May 1974 as a special public institution (“Former JICA”) with the promulgation of the Act of Japan International Cooperation Agency. In December 2001, a reorganization and rationalization plan for special public institutions was announced by the Japanese government. Included in this reform plan was a measure transforming JICA into an incorporated administrative agency. This was put into effect by the JICA Act, and Former JICA was re-established as an incorporated administrative agency in October 2003.

Separately, in December 1960, the Overseas Economic Cooperation Fund Law was promulgated pursuant to which the Overseas Economic Cooperation Fund was established to take over management of the Southeast Asia Development Cooperation Fund from the Export-Import Bank of Japan (“JEXIM”). In April 1999, the Japan Bank for International Cooperation Law was promulgated, and the Japan Bank for International Cooperation (“JBIC”) was established, which succeeded the operations of the Overseas Economic Cooperation Fund and JEXIM.

JICA, in its current form, was established in October 2008 following the enactment in November 2006 of the Act for Partial Amendments to the Act of the Incorporated Administrative Agency—Japan International Cooperation Agency. Pursuant to such Act, the operations of Former JICA, Finance and Investment previously managed by JBIC and a portion of Grant Aid provided by the Ministry of Foreign Affairs of Japan (“MOFA”) were succeeded by JICA. MOFA remains responsible for directly providing Grant Aid in conjunction with the execution of diplomatic policies.

Mission and Vision

JICA announced its current mission (“JICA, in accordance with the Development Cooperation Charter, will work on human security and quality growth”) and vision (“Leading the world with trust”) in July 2017, in light of the changing international relations. JICA will seek to achieve its mission and vision by committing itself to achieving them with pride and passion, immersing itself in the relevant site (gemba) and working together with people on-site, planning and acting strategically with broad and long-term perspective, bringing together diverse wisdom and resources, and thinking innovatively to bring about unprecedented impact. JICA, with its partners,

will seek to take the lead in forging bonds of trust across the world, aspiring for a free, peaceful and prosperous world where people can hope for a better future and explore their diverse potential.

Strategy

Mid-Term Objectives and Plan

In accordance with Article 30, Paragraph 1 of the Act on General Rules for Incorporated Administrative Agencies, JICA has established a mid-term plan for achieving its mid-term objectives during the five-year period that commenced on April 1, 2022. Operational focuses for JICA’s mid-term objectives and plans include, among others:

•

Sustainable Development Goals

JICA plans to play a key role in achieving the SDGs, making use of Japan’s own experience in the socioeconomic development of Japan and in cooperation for the development of the international community. Specifically, JICA plans to play a key role in achieving goals for zero hunger, health, education, water/sanitation, energy, economic growth, industry/infrastructure, sustainable cities, climate actions and forests/biodiversity.

JICA intends to use Japan’s own knowledge, introduce innovations and collaborate with local and international partners in order to accelerate the achievement of the SDGs. For example, see “—Recent Developments—Measures to Address Climate Change.”

Recent Developments

Response to COVID-19

The rapid spread of COVID-19 has threatened the health and livelihoods of people across the world. The pandemic has damaged global economies, pushed millions of additional people into extreme poverty and negatively impacted future generations by disrupting their opportunities to receive education. Under JICA’s mission to achieve “human security”, JICA has long contributed to efforts for improving healthcare systems in developing countries including measures to combat infectious diseases. In the early twentieth century, Dr. NOGUCHI Hideyo, a Japanese scientist, worked hard to find the major causes of disease transmission. In his name, Ghana established the Noguchi Memorial Institute for Medical Research with Japan’s cooperation, including JICA’s technical support since 1986. This institute has not only conducted 80% of Ghana’s PCR testing to diagnose COVID-19 at the peak of its pandemic, but has also been training laboratory technicians in West Africa.

As of March 31, 2022, JICA had extended COVID-19 Crisis Response Emergency Support Loans to 14 countries totaling around 379.5 billion yen in the aggregate, pursuant to which it aims to mitigate the negative social and economic impact of the COVID-19 pandemic by providing budgetary support.

Measures to Address Climate Change

In its sustainability report pubslihed in November 2022, JICA outlined the following strategies, measures and policies to address climate change.

As a key partner to developing countries, JICA aims to lead sustainable development by promoting climate cooperation in support of transitioning to a decarbonized and climate-resilient society. Through these efforts, JICA contributes to the achievement of the Paris Agreement, which is an international treaty for achieving the objectives of the United Nations Framework Convention on Climate Change (UNFCCC); other multilateral environmental/climate-related conventions (such as the Convention on Biological Diversity, a legal framework for the conservation of biological diversity, the sustainable use of the components of biological diversity and the fair and equitable sharing of the benefits arising out of the utilization of genetic resources; the United Nations Convention to Combat Desertification, a legal framework set up to address desertification and the effects of drought; and the Sendai Framework for Disaster Risk Reduction, which provides United Nations Member States with concrete actions to protect development gains from the risk of disaster); associated SDGs; and other related initiatives led by the Japanese government (notably, the Osaka Blue Ocean Vision, through which Japan aims to reduce additional pollution by marine plastic litter and supports developing countries’ efforts in connection with the same).

Specifically, JICA has set forth the following actions as a focus:

•

JICA has also made efforts to combat climate change, including through sector specific strategies in the energy and agriculture sectors.

With respect to project implementation, JICA emphasizes measures including:

•

Collaboration with various stakeholders;

•

Mobilizing additional finance (via collaboration with the private sector or other funding sources, such as the Green Climate Fund (GCF));

•

Utilizing knowledge and technology from Japan and other countries;

•

Strategic dissemination of information;

•

Inter-city and intra-regional collaboration/cooperation; and

•

Innovation, such as via digital transformation (DX).

JICA identifies and assesses climate risks (hazards, exposures, and vulnerabilities) in its cooperation projects and considers necessary measures at the project formulation stage. Specifically, the “JICA Climate-FIT” tool, which is a methodology that aims to grasp the business effects of projects supported by JICA, is used by JICA to assess the climate risk of all of its projects and to examine the possibility of incorporating activities that further strengthen climate change countermeasures, such as mitigation and adaptation. In the project planning stage, JICA may provide assistance through its preparatory surveys, which are undertaken at the preparation stage of a project, either to set a development goal for cooperation and draft suitable cooperation scenarios for attaining such goal or to identify and formulate individual projects and basic plans for such projects. In addition to other procedures related to climate risk, JICA also enhances the climate-related capacity of recipient countries through measures such as improving institutional frameworks, policies and its enforcement capacity through first-hand technical cooperation.

As indicated by the G7 Leaders’ Communiqué from the June 2022 meeting of the Leaders of the Group of Seven (G7), Japan has ended new direct government support for unabated international thermal coal power generation by the end of 2021. In addition, recognizing the importance of national security and geostrategic interests, Japan has committed to end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited circumstances clearly defined by each country consistent with a 1.5°C warming limit and the goals of the Paris Agreement.

JICA operates in accordance with such Japanese government policies.

JAPAN

The following information updates information in Japan’s annual report on Form 18-K for the fiscal year ended March 31, 2022 and should be read in conjunction with any future periodic reports and amendments filed by Japan with the Commission. The following section has been updated to reflect current information and has not been revised in its entirety. In the following section, information pertaining to previous years is provided solely for your convenience.

GENERAL

Area and Population

Japan, an archipelago in the western Pacific, consists of four main islands (Hokkaido, Honshu, Kyushu and Shikoku) which are mostly mountainous located in the same approximate range of latitude as the east coast of the United States north of Florida. The total area of Japan is approximately 146,000 square miles, which is slightly less than that of California and about 4% of the United States. It is bordered by the Sea of Japan to the west and north, and by the Pacific Ocean to the east and south.

Japan has a total population of approximately 125 million (estimated as of January 1, 2023). It has one of the highest population densities in the world and approximately 24.2% of its people (estimated as of October 1, 2021) are concentrated in three metropolitan areas (Tokyo, Osaka and Nagoya). Japan’s rate of population decrease during the years 2017-2021 was 1.1%. Japan’s population decreased 0.5% during the 12 months ended October 1, 2021 (estimated as of October 1, 2021).

Government

The legislative power in Japan is vested in the Diet, which currently consists of a House of Representatives having 465 members and a House of Councillors having 248 members. Members of both houses are elected by direct universal suffrage, except that some members of each house are elected by proportional representation. The power of the House of Representatives is superior to that of the House of Councillors in respect of approving certain matters including the national budget and electing the Prime Minister.

The executive power is vested in the Cabinet consisting of a Prime Minister, elected by the Diet from among its members, and other Ministers appointed by the Prime Minister, a majority of whom must be members of the Diet. The judicial power is vested in the Supreme Court and such lower courts as are established by law.

Japan’s 47 prefectures, and its cities, towns and villages, have a certain degree of local autonomy through popularly elected legislative bodies and chief executives. The central government exercises its influence on local governments indirectly through financial aid and prescribing standards of local administration.

Political Parties

Members of the House of Representatives are elected for four-year terms unless the House of Representatives is dissolved prior to expiration of their terms. The House of Representatives was dissolved on October 14, 2021, and an election was held on October 31, 2021. 289 members were elected from single-member districts and 176 members were elected through a proportional representation process from 11 regional districts. Pursuant to a revision of the Public Offices Election Act in July 2018, the number of seats in the House of Councillors was increased to 248 from 242. The members are elected for six-year terms with one-half of the membership being elected every three years. In an election in July 2022, 124 members were elected, of which 50 members were elected through a proportional representation system and 74 members were elected from 45 districts that correspond to the 47 prefectures of Japan. Currently, the House of Councillors consists of 124 members whose term expires in July 2025 and 124 members whose term expires in July 2028.

The following tables set forth the membership by political party of the House of Representatives as of January 18, 2023 and the House of Councillors as of January 25, 2023.


	House of Representatives
Liberal Democratic Party		260
The Constitutional Democratic Party of Japan and the Independent		97
Nippon Ishin (Japan Innovation Party)		40
Komeito		32
Democratic Party For the People		10
Japanese Communist Party		10
Yushi no Kai		5
REIWA SHINSENGUMI		3
Independents		5
Vacancies		3

Total		465

Source: House of Representatives.


	House of Councillors
Liberal Democratic Party		118
The Constitutional Democratic Party of Japan and Social Democratic Party		40
Komeito		27
Nippon Ishin (Japan Innovation Party)		21
Democratic Party For the People and The Shin-Ryokufukai		13
Japanese Communist Party		11
REIWA SHINSENGUMI		5
NHK Party		2
Okinawa Whirlwind		2
Independents		9
Vacancies		0

Total		248

Source: House of Councillors.

Leadership

Japan’s current Prime Minister is KISHIDA Fumio, a member of the Liberal Democratic Party of Japan and member of the House of Representatives in the Diet. KISHIDA Fumio was elected as Japan’s 100th Prime Minister on October 4, 2021, succeeding the former Prime Minister SUGA Yoshihide.

International Organizations

Japan is a member of the United Nations and other international organizations, including the International Monetary Fund, International Bank for Reconstruction and Development, International Development Association, International Finance Corporation, International Fund for Agricultural Development, Multilateral Investment Fund, Multilateral Investment Guarantee Agency, Asian Development Bank, African Development Bank, African Development Fund, European Bank for Reconstruction and Development, Inter-American Development Bank and Inter-American Investment Corporation. See “—Subscriptions to International Financial Organizations”.

International Trade Agreements

Japan signed an agreement to join the Trans-Pacific Partnership, or TPP, on February 4, 2016. Upon the ratification of the TPP, Japan and the other participating countries planned to not only eliminate tariffs on products but also liberalize services and investment, and establish rules in a wide range of fields, including intellectual property, e-commerce and the environment. Although Japan ratified the TPP on January 20, 2017, the United States announced its formal withdrawal from the TPP on January 23, 2017. On March 8, 2018, Japan and ten other countries excluding the United States signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, pursuant to which each signatory country agreed to start the necessary preparations for the implementation of the TPP. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership entered into force for Japan, Mexico, Singapore, New Zealand, Canada, and Australia on December 30, 2018, for Vietnam on January 14, 2019, for Peru on September 19, 2021 and for Malaysia November 29, 2022. On February 1, 2021, the United Kingdom formally applied to join the TPP. Japan intends to facilitate the process of commencing negotiations with the United Kingdom pursuant to the application procedures under the TPP and in cooperation with the other members.

Japan has also entered into Economic Partnership Agreements, or EPAs, with various countries, including Singapore, Mexico, Malaysia, Chile and Thailand. As of June 2022, Japan had entered into a total of 21 EPAs (including the TPP) with 24 countries and regions. Pursuant to the EPAs, Japan will collaborate comprehensively with the counterparties to, among other things, reduce or eliminate tariffs, grant most-favored-nation status in the fields of investment, services and government procurement and expedite patent review and enhance patent protection in the field of intellectual property.

Japan is also a member of international organizations which are based on international trade treaties and other agreements which seek to promote free trade in the international market, including the following: the World Trade Organization, the Organization for Economic Co-operation and Development, the World Customs Organization and the International Trade Centre.

The following is a map of Japan, illustrating its location with respect to neighboring countries:

LOGO

THE ECONOMY

General

Japan has a highly advanced and diversified economy, which has developed in response to changing conditions in Japan and the world. During the era of high economic growth in the 1960s and the early 1970s, the expansion was based on the development of heavy industries consuming large quantities of resources. During the 1980s, there was rapid growth in high value-added industries, such as electronics and precision instruments, which employ high level technology and consume relatively low quantities of resources. The service sector of the economy grew significantly during the 1980s and 1990s.

While the Japanese economy expanded during the period from 2002 to 2007, amidst that expansion, and prior to the global economic crisis of 2008, Japan continued to face several domestic economic difficulties. Among other things, domestic consumption contributed to the economic recovery to a lesser degree than was the case in prior economic growth periods. Also, despite the improving employment environment at the time, the average wage failed to grow appreciably. While those Japanese manufacturing companies with a global competitive edge achieved growth on the back of the favorable world economy, small-to-medium enterprises and non-manufacturing sectors realized only limited productivity growth and profitability. This in turn caused imbalance in the level of economic recovery among the different regions in Japan. In the longer term, Japan faced a declining population, mass retirement of the baby boomer generation, environmental/energy conservation agenda, and fiscal deficit problem. Against this backdrop, the subprime loan crisis in the United States and increases in the prices of energy and raw materials precipitated weakness in the global economy, caused the Japanese economy to deteriorate. Throughout JFY 2008, the global economy continued to worsen, as the collapse of several major financial institutions in the United States and other factors contributed to a credit tightening, volatility in stock, currency and other markets, loss of consumer confidence and decrease in business and industrial activities on a global basis. The Japanese economy was also adversely affected by these factors, especially as Japan’s export sector was hit by the decline in global demand and appreciation of the yen against other major currencies. After February 2008, Japan had entered a recession. The Japanese economy in JFY 2010 picked up, despite a difficult situation where the unemployment rate remained at a high level.

On March 11, 2011, just as the Japanese economy was in a transition from the state of stagnation to recovery, the Great East Japan Earthquake (the “Earthquake”) struck Japan. As a result, the Japanese economy posted negative growth for the first and second quarter in 2011. Unlike the cases of the Great Hanshin-Awaji Earthquake in 1995 or Hurricane Katrina in 2005, personal consumption declined on a nationwide basis, with consumer sentiment deteriorating sharply after the Earthquake. The Earthquake had a severe impact on production in Japan through the shutdown of damaged factories, disruptions of the supply chains and power supply constraints. In particular, the Earthquake affected Japan’s auto industry which depends on the Tohoku region for the supply of key parts including semiconductors and other electronic components. The supply constraints and the slower growth in corporate earnings in the aftermath of the Earthquake also put downward pressure on capital investment activities. The Earthquake was accompanied by a nuclear power plant accident, which not only caused power supply constraints but also had a chilling effect on certain business activities, such as in the tourism and leisure sectors. Following the Earthquake, the number of visitors to Japan from foreign countries dropped by approximately half from the monthly averages in the prior year. The Earthquake and its aftermath prompted the Government of Japan to compile a series of supplementary budgets to support reconstruction efforts. On May 2, 2011, a first supplementary budget of approximately ¥4 trillion was approved by the Diet to finance reconstruction relating to damages from the Earthquake and tsunami. The budget was aimed at disaster relief, including providing temporary housing, rebuilding of facilities and disaster assistance loans. On July 25, 2011, the Japanese government approved a second supplementary budget of approximately ¥2 trillion aimed at further disaster relief, including increasing the Contingency Reserve for Recovery from the Great East Japan Earthquake. On November 21, 2011, the Japanese government approved the third supplementary budget of approximately ¥12 trillion aimed at disaster relief, including provision of emergency support to people affected by the disaster and reconstruction of public utilities and facilities. On February 8, 2012, the Japanese government approved the fourth supplementary budget including the establishment of a government guaranteed ¥500 billion credit facility in response to the so-called “Overlapping Debt Problem”,

whereby the burden of existing debt makes it difficult to raise funds for victims of the Earthquake. Thereafter, the Japanese government approved budgets of approximately ¥4 trillion for JFY 2012, ¥5 trillion for JFY 2013 and ¥4 trillion for JFY 2014 to finance reconstruction efforts.

The Earthquake and the nuclear disaster in Fukushima were followed by severe flooding that occurred at the end of July 2011 in Thailand, one of Japan’s largest trading partners for both exports and imports. The suspended operations of the local factories in Thailand suppressed Japan’s Thailand bound exports of goods including intermediary materials for cars and electronics and thereby adversely affected the Japanese economy.

Thus, JFY 2011 started in a very challenging environment, with the Earthquake seriously crippling the economy, which posted negative growth for the first quarter. Over time, the government and the people joined forces in an all-out effort to rebuild the social and economic infrastructure, facilitating a rapid recovery of the supply chains and helping the economy on a track to a gradual recovery. Since the summer of 2011, however, the rapid appreciation of the yen, the reduced external demand due to the Thai flooding (as described above) and deceleration in the world economy stemming from the European sovereign debt crisis kept such recovery to a modest level.

In December 2012, the Cabinet Office of the Government of Japan announced “Abenomics” (named after the former Prime Minister ABE Shinzo), an economic strategy of pursuing an expansionary monetary policy, a flexible fiscal policy and an economic growth agenda that promotes private investment, with the goal of achieving GDP growth and job creation. Pursuant to this strategy, specific measures to be implemented include accelerating reconstruction efforts in areas damaged by the Earthquake, increasing stimulus spending and subsidies aimed at strategically important sectors and utilizing a more flexible approach to economic and fiscal management. Other more recent Abenomics measures include the liberalization of electricity retail sales in April 2016 and the liberalization of gas retail sales in April 2017.

Additionally, in January 2013, the Government of Japan and the Bank of Japan (the “BOJ”) issued a joint statement announcing measures to overcome deflation and achieve sustainable economic growth with price stability in order to establish a sustainable fiscal structure and sound fiscal management. In March 2013, KURODA Haruhiko, former President of the Asian Development Bank, was appointed as governor of the BOJ. In April 2013, the BOJ announced its new quantitative and qualitative monetary easing policy, under which the BOJ is aiming to achieve a price stability target of 2% in terms of the year-on-year rate of change in the consumer price index at the earliest possible time, with a time horizon of about two years. Nominal GDP increased by 2.4% during JFY 2021, and the annual growth rate of real GDP was 2.5%. The Japanese Diet has passed comprehensive social security and tax reform, including an increase in the consumption tax rate from 5% to 8% in 2014, and from 8% to 10% in 2015. Accordingly, the consumption tax rate was increased to 8% in April 2014. The increase in the consumption tax rate from 8% to 10% was postponed but introduced in October 2019. Due in part to this increase in the consumption tax, real GDP decreased during the fourth quarter of 2019 by 2.7% compared to the prior quarter. In addition to the increase in the consumption tax rate, as part of the tax reform, the effective corporate tax rate was reduced from 34.62% to 32.11% for JFY 2015 and it was further reduced to 29.97% for JFY 2016 and to 29.74% for JFY 2018.

The Japanese economy faces certain challenges. Challenges for the Japanese economy include, as further described herein, an increased dependence on LNG and other energy imports as a result of the nuclear accident at the Fukushima Daiichi Nuclear Plant and suspension of operations at other nuclear power plants and, over the long term, demographic challenges, such as the decline in the labor market due to the population aging and decreasing population, and the high levels of public debt and associated debt servicing payments. In addition, the Japanese economy is also exposed to challenges due to the potential impact of political disputes, technology and trade tensions with or among major trading partners, including China and the United States, as well as the potential escalation of geopolitical risks associated with the Middle East, North Korea or other countries or regions, which may negatively impact Japan’s international trade and economy more generally.

In December 2019, the emergence of COVID-19 was reported in Wuhan, Hubei Province, China and COVID-19 has subsequently spread throughout the world, including in Japan. On January 30, 2020, the World Health Organization declared COVID-19 a public health emergency of international concern and, on

March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. The COVID-19 pandemic is currently having an adverse impact on the global economy, the severity and duration of which is difficult to predict.

In order to slow the spread of COVID-19, the Japanese central and local governments have implemented a number of measures, including the declaration of multiple states of emergency by the Prime Minister of Japan. In addition, the emergence of a new COVID-19 variant in late 2021 prompted the Japanese government to re-impose international travel restrictions including closure of international borders to almost all foreign nationals and resulted in the introduction of certain other preventative measures. These restrictions had, and may further have in the future a severe impact on both business travel and inbound international tourism, an important and formerly growing sector of the Japanese economy. According to the Monthly Economic Report published by the Cabinet Office of Japan for January 2023 published on January 25, 2023, parts of the economy are showing weakness, while economic activity is recovering moderately as the impact of COVID-19 eases. Although many of the preventative measures such as restrictions on international travel have been recently relaxed, the number of infections continues to be high, and the duration and extent of the economic impact of COVID-19 still remain highly uncertain.

While it is not clear how inflation will affect the Japanese yen, consumer and industrial prices in Japan, it is possible that inflationary trends may negatively affect the Japanese economy.

Summary of Key Economic Indicators

The following tables set forth information regarding certain of Japan’s key economic indicators for the periods indicated:


	JFY 2017			JFY 2018			JFY 2019			JFY 2020			JFY 2021
	(yen amounts in billions, except percentages and index)
Percentage Changes of GDP from Previous Year
At Nominal Prices		2.0	%		0.2	%		0.0	%		-3.5	%		2.4	%
At Real Prices^(a)		1.8			0.2			-0.8			-4.1			2.5
Total Revenues of Consolidated General and Special Accounts	¥	244,729		¥	243,868		¥	251,292		¥	353,277		¥	322,651
Total Expenditures of Consolidated General and Special Accounts		229,389			226,661			232,905			305,846			285,348
Surplus of Consolidated Revenues over Consolidated Expenditures		15,340			17,206			18,387			47,431			37,303
Public Debt		934,321			954,863			965,926			993,542			1,037,735

(a)	Real prices are based on calendar year 2015.

Source: Economic and Social Research Institute; Cabinet Office; and Ministry of Finance.


	2017			2018			2019			2020			2021			2022
	(yen or dollar amounts in billions, except percentages and index)
Unemployment Rate		2.8	%		2.4	%		2.4	%		2.8	%		2.8	%		—
Consumer Price Index^(a)		98.6			99.5			100.0			100.0			99.8			102.3
Annual Change		0.5	%		1.0	%		0.5	%		0.0	%		-0.2	%		2.5	%
Corporate Goods Price Index^(b)		98.4			101.0			101.2			100.0			104.6			114.7
Annual Change		2.3	%		2.6	%		0.2	%		-1.2	%		4.6	%		9.7	%
Current Account regarding Balance of Payments	¥	22,778		¥	19,505		¥	19,251		¥	15,674		¥	15,488			—
Official Foreign Exchange Reserves	$	1,264		$	1,271		$	1,324		$	1,395		$	1,406		$	1,228

(a)	Calendar year 2020 = 100.

(b)	Calendar year 2020 = 100. Indices are calculated using the monthly averages.

Gross Domestic Product and National Income

The following table sets forth information pertaining to Japan’s gross domestic product for JFY 2017 through JFY 2021. Nominal GDP increased by 2.4% during JFY 2021, and the annual growth rate of real GDP was 2.5%. While the duration and extent of the economic impact of COVID-19 remain highly uncertain, it is likely that the continued spread of COVID-19 will have a significant negative impact on the Japanese economy, including with respect to nominal and real GDP.

Gross Domestic Product


	JFY 2017			JFY 2018			JFY 2019			JFY 2020			JFY 2021			Percentage of JFY 2021 GDP
	(yen amounts in billions)
Total Consumption
Private sectors	¥	303,006		¥	304,774		¥	303,859		¥	288,505		¥	296,250			53.8	%
Public sectors		107,707			109,089			111,827			113,798			118,968			21.6

		410,713			413,863			415,686			402,303			415,217			75.4
Total Gross Capital Formation
Private sectors
Producers’ Durable Equipment		90,183			92,386			91,643			86,041			90,079			16.4
Residential Construction		21,248			20,539			21,393			19,869			21,129			3.8
Public sectors		27,687			28,391			29,297			30,839			29,807			5.4

		139,118			141,315			142,332			136,749			141,015			25.6
Additions to Business Inventories
Private sectors		1,748			2,212			883			-961			1,106			0.2
Public sectors		89			-71			-5			-101			-90			-0.0

		1,838			2,141			878			-1,062			1,016			0.2
Net Exports of Goods and Services		4,044			-749			-2,060			-429			-6,718			-1.2

Nominal Gross Domestic Expenditures	¥	555,713		¥	556,571		¥	556,836		¥	537,562		¥	550,530			100.0	%

Real Gross Domestic Expenditures^(b)	¥	553,174		¥	554,546		¥	550,131		¥	527,388		¥	540,796

Surplus of the Nation on Current Account
Exports of Goods and Services and Other Receipts from Abroad		31,346			33,864			34,329			29,794			41,193
Less: Imports of Goods and Services and Other Payments Abroad		11,026			12,153			12,483			10,156			11,943

		20,320			21,712			21,847			19,639			29,251

Gross National Income	¥	576,033		¥	578,282		¥	578,683		¥	557,200		¥	579,781
Percentage Changes of GDP from Previous Year
At Nominal Prices		2.0	%		0.2	%		0.0	%		-3.5	%		2.4	%
At Real Prices^(b)		1.8			0.2			-0.8			-4.1			2.5
Deflator^(C)		0.2			-0.1			0.9			0.7			-0.1

(a)	GDP financial data are subject to change.

(b)	Real prices are based on calendar year 2015.

(c)	Deflator is a price index used to convert nominal prices into real prices. Deflator is derived by dividing nominal GDP by real GDP.

Source: Economic and Social Research Institute, Cabinet Office.

The following table sets forth information pertaining to Japan’s gross domestic product, as seasonally adjusted, for each of the eight quarters ended September 30, 2022.


	Quarterly Gross Domestic Product^(a)
	2020			2021												2022
	Fourth Quarter			First Quarter			Second Quarter			Third Quarter			Fourth Quarter			First Quarter			Second Quarter			Third Quarter
	(yen amounts in billions)
Nominal Gross Domestic Expenditures^(b)	¥	548,689		¥	548,493		¥	550,578		¥	547,268		¥	551,927		¥	552,910		¥	558,196		¥	554,126

Real Gross Domestic Expenditures^(b)(c)	¥	539,388		¥	538,623		¥	540,376		¥	537,937		¥	544,416		¥	541,965		¥	547,946		¥	546,815

Percentage Changes of GDP from the Previous Quarter
At Nominal Prices^(d)		1.7	%		-0.0	%		0.4	%		-0.6	%		0.9	%		0.2	%		1.0	%		-0.7	%
At Real Prices^(c)(d)		1.9			-0.1			0.3			-0.5			1.2			-0.5			1.1			-0.2
Deflator^(e)		-0.2			0.1			0.1			-0.2			-0.3			0.6			-0.1			-0.5

(a)	Quarterly GDP financial data are subject to change.

(b)	Numbers are based on seasonally-adjusted GDP figures.

(c)	Real prices are based on calendar year 2015.

(d)	Percentage changes are based on seasonally-adjusted GDP figures.

(e)	Deflator is a price index used to convert nominal prices into real prices. Deflator is derived by dividing nominal GDP by real GDP.

Source: Economic and Social Research Institute, Cabinet Office.

Per Capita Gross Domestic Product

The following table indicates per capita gross domestic product for the last five years:


	Per Capita GDP
Fiscal Year	Amount (in thousands of yen)		Year-on-year change (%)
2017	¥	4,379		2.1
2018		4,392		0.3
2019		4,401		0.2
2020		4,261		-3.2
2021		4,386		2.9
Source: Economic and Social Research Institute, Cabinet Office.

National Income

The following table sets forth national income for calendar year 2017 through calendar year 2021.


	National Income
	2017			2018			2019			2020			2021
	(yen amounts in billions)
Domestic Factor Income	¥	380,613		¥	381,191		¥	379,551		¥	357,831		¥	365,220
Net Income from Abroad		20,461			21,289			21,857			19,576			26,669

National Income at Factor Cost	¥	401,074		¥	402,481		¥	401,408		¥	377,407		¥	391,888

Percentage Changes of Income at Factor Cost from Previous Year		2.0	%		0.4	%		(0.3	)%		(6.0	)%		3.8	%

Source: Economic and Social Research Institute, Cabinet Office.

Industry

The following table sets forth the proportion of gross domestic product contributed by major industrial sectors of the economy for calendar year 2017 through calendar year 2021.

GDP by Industrial Sectors (at nominal prices)


	2017			2018			2019			2020			2021
Industry
Agriculture, forestry and fishing		1.1	%		1.0	%		1.0	%		1.0	%		1.0	%
Mining		0.1			0.1			0.1			0.1			0.1
Manufacturing		20.4			20.6			20.2			20.0			20.5
Electricity, gas and water supply and waste management service		2.9			2.9			3.1			3.2			2.8
Construction		5.4			5.4			5.5			5.7			5.5
Wholesale and retail trade		13.0			12.7			12.4			12.7			13.6
Transport and postal services		5.3			5.3			5.4			4.2			4.1
Accommodation and food service activities		2.6			2.6			2.5			1.7			1.4
Information and communications		4.8			4.9			4.9			5.1			5.1
Finance and insurance		4.0			4.1			4.0			4.2			4.3
Real estate		11.8			11.7			11.8			12.2			11.9
Professional, scientific and technical activities		8.0			8.1			8.3			8.7			8.8
Public administration		4.9			4.9			5.0			5.2			5.1
Education		3.4			3.4			3.5			3.5			3.5
Human health and social work activities		7.6			7.7			7.8			8.2			8.3
Other service activities		4.1			4.0			4.1			3.7			3.7

Total		99.5	%		99.5	%		99.5	%		99.5	%		99.6	%

Source: Economic and Social Research Institute, Cabinet Office, Annual Report on National Accounts.

Energy

The following table sets forth the total amounts of primary energy supplied and the percentages supplied by different sources for JFY 2017 through JFY 2021.


JFY	Total Primary Energy Supplied (peta- joules)		Sources of Primary Energy Supplied^(a)
JFY			Oil			Coal			Nuclear			Natural Gas			Other
2017		20,098		39.0	%		25.1	%		1.4	%		23.4	%		11.1	%
2018^(b)		19,720		37.6			25.1			2.8			22.9			11.7
2019^(b)		19,136		37.1			25.3			2.8			22.4			12.4
2020^(b)		17,961		36.4			24.6			1.8			23.8			13.4
2021^(b)		18,575		36.3			25.4			3.2			21.5			13.6

(a)	Figures represent the proportion of each source as a share of the domestic primary energy supplied. Domestic primary energy supplied is total primary energy supplied less exports and inventory adjustments.

(b)	Standard heating value by energy source, which is used to create total primary energy supplied statistics, is revised every five years. Figures for 2018 through 2021 represent the revised standard heating value by energy source.

Source: Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry, Report on Energy Supply and Demand.

The table below sets forth information regarding crude oil imports for JFY 2017 through JFY 2021.


	JFY 2017		JFY 2018		JFY 2019		JFY 2020		JFY 2021
Volume of imports (thousand kilo-liters per day)		501		475		471		385		403
Cost of imports (c.i.f. in billions of yen)	¥	7,283	¥	8,721	¥	7,980	¥	4,058	¥	8,017
Average price (c.i.f. in yen kilo-liters)	¥	39,828	¥	50,274	¥	46,389	¥	28,872	¥	54,515

Source: Customs and Tariff Bureau, Ministry of Finance.

Japan has historically depended on oil for most of its energy requirements and almost all its oil is imported, mostly from the Middle East. Oil price movements thus have a major impact on the domestic economy. Oil price has fluctuated significantly in recent years, reaching approximately ¥75,000 per kilo-liter in January 2014, then dropping below ¥37,000 per kilo-liter in February 2015, and increasing again to approximately ¥50,000 per kilo-liter in June 2015. In the first quarter of 2016, oil price dropped below ¥30,000 per kilo-liter due to oversupply and uncertainties regarding the Chinese economy. After the first quarter, oil price began increasing due to the mild recovery of the world economy and the OPEC agreement to reduce production. Although the oil price significantly declined soon after the outbreak of COVID-19 in 2020, below ¥20,000 per kilo-liter in May 2020, it has steadily increased since then, as the world economy has gradually recovered from the impact of COVID-19. Recently, the oil price has increased sharply to ¥82,444 per kilo-liter in December 2022, in part due to the conflict between Russia and Ukraine and the resulting disruption in the oil supply.

The following table sets forth information relating to total electric power generating capacity and electric power generation for JFY 2016 through JFY 2020.


	JFY 2016		JFY 2017		JFY 2018		JFY 2019		JFY 2020
	(megawatts)
Electric power generating capacity^(a):
Fossil Fuel		194,669		193,462		193,026		189,784		191,758
Hydro-electric		50,117		50,014		50,037		50,033		50,033
Nuclear		41,482		39,132		38,042		33,083		3,308
Other		13,092		16,600		18,988		20,997		23,677

Total		299,362		299,209		300,093		293,897		298,550

	(gigawatt-hours)
Electric power generation:
Fossil Fuel		877,016		861,435		823,589		792,810		789,725
Nuclear		17,300		31,278		62,109		61,035		37,011
Hydro-electric		84,570		90,128		87,398		86,314		86,310
Other		19,024		24,500		27,311		30,611		35,637

Total		997,911		1,007,341		1,000,409		970,771		948,979

(a)	At the end of fiscal year—March 31

Source: Handbook of Electric Power Industry, Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry.

On October 26, 2020, former Prime Minister SUGA Yoshihide declared that Japan intends to achieve carbon neutrality by 2050. To this end, Japan aims to reduce greenhouse gas emissions to virtually zero by 2050 and realize a decarbonized society. On December 25, 2020, the government developed formulated a “Green Growth Strategy Through Achieving Carbon Neutrality in 2050,” which sets high goals for 14 key fields across

energy, transportation/manufacturing and home/office industries. This strategy makes explicit current challenges and future actions by priority field, and formulates action plans covering comprehensive policies in areas such as budgets, taxes, regulation reforms and standardization, and international collaboration. In addition, on June 9, 2021, the government decided on a regional decarbonization roadmap that outlines the process and concrete measures for transitioning to decarbonized society. Based on this roadmap, the Japanese government intends to propagate decarbonization throughout Japan by creating at least 100 decarbonization leading areas by FY2030 and implementing priority measures that will serve as the foundation for decarbonization throughout Japan, especially through an intensive five-year period of policy implementation. The administration of the current Prime Minister, KISHIDA Fumio, has succeeded the policy of the former Prime Minister, SUGA Yoshihide. The Japanese government announced the “Basic Policy on Economic and Fiscal Management and Reform 2022” on June 7, 2022, which intends to focus on investment in green transformation (GX).

Price Indices

The table below sets forth information concerning changes in Japan’s corporate goods and consumer price indices for the periods indicated.


	Corporate Goods Price Index^(a)				Consumer Price Index^(b)
	Index^(c)		Annual % Change		Index		Annual % Change
2018		101.0		2.6		99.5		1.0
2019		101.2		0.2		100.0		0.5
2020		100.0		-1.2		100.0		0.0
2021		104.6		4.6		99.8		-0.2
2022		114.7		9.7		102.3		2.5

(a)

All commodities. Calendar year 2020 = 100. Source: Domestic Corporate Goods Price Index, Bank of Japan.

(b)

General index. Calendar year 2020 = 100. Source: Consumer Price Index, Statistics Bureau, Ministry of Internal Affairs and Communications.

(c)

Indices are calculated using the monthly averages.

Labor

The number of employees increased from 2004 to 2007 and decreased from 2008 to 2012. After recovering in 2013, the number of employees increased from 2014 to 2019, followed by a decrease in 2020, the first in eight years. In 2020, the average employment was estimated at 67.1 million, of which 23.1% were employed in mining, manufacturing and construction, 3.2% were employed in agriculture, forestry and fisheries, and 73.8% were employed in services and other sectors. In 2021, the average employment was estimated at 67.1 million, of which 22.8% were employed in mining, manufacturing and construction, 3.1% were employed in agriculture, forestry and fisheries, and 74.1% were employed in services and other sectors. The unemployment rate (seasonally adjusted) in Japan gradually increased from 2008 to the middle of 2009, but has gradually decreased since the end of 2009. In 2020, the unemployment rate increased for the first time in eleven years. It ranged between 2.7% and 3.0% during 2021. The seasonally adjusted unemployment rate was 2.6% for July, 2.5% for August, 2.6% for September, 2.6% for October and 2.5% for November in 2022, the most recent five months for which statistics are available. Concerning short-term prospects, employment conditions in Japan are expected to continue to pick up while affected by the COVID-19 pandemic and the resulting disruption of business activities. However, both the duration and extent of the impact on employment in Japan remain highly uncertain.

The following table indicates unemployment statistics for Japan for each of the last five years:


Calendar Year	Unemployment Rate (%)
2017		2.8
2018		2.4
2019		2.4
2020		2.8
2021		2.8

Source: Ministry of Internal Affairs and Communications “Labor Force Survey”.

The table below sets forth information regarding wage index (total cash earnings (nominal)) and industrial production index (manufacturing and mining) for the periods indicated.


	Wage Index^(a)						Industrial Production Index^(b)
Calendar Year	Index^(c)			Annual % Change			Index		Annual % Change
2017		—	^(d)		—	^(d)		103.1		3.1
2018		101.6			1.4			104.2		1.1
2019		101.2			-0.4			101.1		-3.0
2020		100.0			-1.2			90.6		-10.4
2021		100.3			0.3			95.7		5.6

(a)

Calendar year 2020 = 100. Source: Monthly Labor Survey, Ministry of Health, Labor and Welfare.

(b)

Calendar year 2015 = 100. Source: Ministry of Economy, Trade and Industry.

(c)

Indices are calculated using the monthly averages.

(d)

Information on calendar year 2017 is not available.

The following table shows selected employment information by industry.


	2017			2018			2019			2020			2021
	(all figures in percentages, except as indicated)
Employed persons (in thousands of persons)		65,420			66,820			67,500			67,100			67,130
Employment by Industry:
Agriculture, forestry and fisheries		3.38	%		3.41	%		3.29	%		3.17	%		3.10	%
Mining, manufacturing and construction		23.78			23.53			23.26			23.06			22.84
Services and other sectors		72.84			73.06			73.45			73.77			74.07

Total		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Source: Ministry of Internal Affairs and Communications “Labor Force Survey”.

The following table shows employment rate by age and gender.


	2017			2018			2019			2020			2021
	(all figures in percentages)
Total		58.8	%		60.0	%		60.6	%		60.3	%		60.4	%
Employment rate by age:
15 - 64 years old		75.3			76.8			77.7			77.3			77.7
15 - 24 years old		42.5			45.9			47.5			46.4			46.6
25 - 34 years old		83.6			84.8			85.3			85.1			86.0
35 - 44 years old		83.6			85.0			85.6			85.0			85.4
45 - 54 years old		85.1			85.7			86.4			86.0			86.0
55 - 64 years old		73.4			75.2			76.3			76.7			77.0
55 - 59 years old		81.0			81.7			82.3			82.2			82.1
60 - 64 years old		66.2			68.8			70.3			71.0			71.5
65 and over		23.0			24.3			24.9			25.1			25.1
65 - 69 years old		44.3			46.6			48.4			49.6			50.3
70 - 74 years old		27.2			30.2			32.2			32.5			32.6
75 and over		9.0			9.8			10.3			10.4			10.5
25 - 44 years old		83.6			84.9			85.5			85.0			85.7
Employment rate by gender:
Male		68.4			69.3			69.7			69.3			69.1
Female		49.8			51.3			52.2			51.8			52.2

Source: Ministry of Internal Affairs and Communications “Labor Force Survey”.

The following table shows employment data by type of employment.


	2017		2018		2019		2020		2021
	(in thousands of persons)
Employee (except for executive of company or corporation)		54,740		56,170		56,880		56,550		56,620
Regular employee		34,340		34,920		35,150		35,560		35,870
Non-regular employee		20,400		21,260		21,730		21,000		20,750

Source: Ministry of Internal Affairs and Communications “Labor Force Survey”.

Aging Workforce and Population Decrease

One of the risks that the Japanese economy bears is the issue of the aging of the population accompanied with an overall population decrease. Population aging and decrease have placed downward pressure on economic growth. The negative impact can be reduced by enhancing productivity and competitiveness through the further opening of the Japanese economy to the world. These trends have an impact not only on the macro growth rate but also on consumption patterns (such as the older generations spending more than younger generations on service consumption) and, consequently, the country’s economic structure.

The impact of the aging and shrinking population on Japan’s fiscal structure looms as a long-term risk. Social security benefit payments under the current system continues to increase. The ratio of pensions to national income are expected to remain at the same level, but that of welfare including medical benefits and nursing-care benefits have continuously increased and is expected to further grow. Population aging and decrease will thus modify the Japanese revenue structure. Furthermore, amid increasing capital mobility, it is imperative for Japan to foster an environment attractive to business enterprises. Under these circumstances, it has become more and more difficult to impose additional tax burdens on the income of individuals and corporations. The effects of the aging and shrinkage of the population would also be prominent in Japan’s regional economies.

The following table indicates the age distribution of Japan’s population:

Population and Percentage distribution by Age (5-Year Age Group)


	Both sex
Age groups	2017		2018		2019		2020		2021
	Population (in thousands of persons)
Total		126,706		126,443		126,167		126,146		125,502

0 - 4 years old		4,909		4,838		4,758		4,541		4,389
5 - 9		5,251		5,184		5,101		5,114		5,038
10 - 14		5,432		5,392		5,351		5,376		5,357
15 - 19		5,995		5,907		5,820		5,706		5,580
20 - 24		6,228		6,330		6,388		6,320		6,263

25 - 29		6,291		6,223		6,240		6,384		6,379
30 - 34		7,112		6,936		6,752		6,714		6,556
35 - 39		7,884		7,694		7,551		7,498		7,354
40 - 44		9,443		9,093		8,718		8,476		8,173
45 - 49		9,457		9,666		9,802		9,868		9,732

50 - 54		8,156		8,360		8,567		8,738		9,252
55 - 59		7,592		7,651		7,711		7,940		7,824
60 - 64		7,804		7,591		7,523		7,442		7,391
65 - 69		9,921		9,368		8,709		8,236		7,869
70 - 74		7,749		8,234		8,686		9,189		9,672

75 - 79		6,738		6,932		7,241		7,065		6,712
80 - 84		5,293		5,347		5,328		5,404		5,563
85 - 89		3,396		3,514		3,612		3,742		3,872
90 - 94		1,582		1,674		1,761		1,811		1,904
95 - 99		405		439		479		500		537

100 and over		67		69		69		80		85

Regrouped
0 - 14 years old		15,592		15,415		15,210		15,032		14,784
15 - 64		75,962		75,451		75,072		75,088		74,504
65 and over		35,152		35,578		35,885		36,027		36,214
65 - 74 years old		17,670		17,603		17,395		17,425		17,540
75 and over		17,482		17,975		18,490		18,602		18,674


	Both sex
Age groups	2017		2018		2019		2020		2021
	Percentage Distribution (%)
Total		100.00		100.00		100.00		100.00		100.00

0 - 4 years old		3.87		3.83		3.77		3.60		3.50
5 - 9		4.14		4.10		4.04		4.05		4.01
10 - 14		4.29		4.26		4.24		4.26		4.27
15 - 19		4.73		4.67		4.61		4.52		4.45
20 - 24		4.92		5.01		5.06		5.01		4.99

25 - 29		4.97		4.92		4.95		5.06		5.08
30 - 34		5.61		5.49		5.35		5.32		5.22
35 - 39		6.22		6.08		5.98		5.94		5.86
40 - 44		7.45		7.19		6.91		6.72		6.51
45 - 49		7.46		7.64		7.77		7.82		7.75

50 - 54		6.44		6.61		6.79		6.93		7.37
55 - 59		5.99		6.05		6.11		6.29		6.23
60 - 64		6.16		6.00		5.96		5.90		5.89
65 - 69		7.83		7.41		6.90		6.53		6.27
70 - 74		6.12		6.51		6.88		7.28		7.71

75 - 79		5.32		5.48		5.74		5.60		5.35
80 - 84		4.18		4.23		4.22		4.28		4.43
85 - 89		2.68		2.78		2.86		2.97		3.09
90 - 94		1.25		1.32		1.40		1.44		1.52
95 - 99		0.32		0.35		0.38		0.40		0.43

100 and over		0.05		0.05		0.05		0.06		0.07

Regrouped
0 - 14 years old		12.31		12.19		12.06		11.92		11.78
15 - 64		59.95		59.67		59.50		59.52		59.36
65 and over		27.74		28.14		28.44		28.56		28.86
65 - 74 years old		13.95		13.92		13.79		13.81		13.98
75 and over		13.80		14.22		14.66		14.75		14.88

FOREIGN TRADE AND BALANCE OF PAYMENTS

Foreign Trade

Japan is one of the leading trading nations of the world, ranking fifth to China, the United States, Germany and the Netherlands in merchandise exports and ranking fourth to the United States, China and Germany in merchandise imports among the IMF member countries in 2021.

In 2021, Japan had a trade deficit of ¥1,784 billion due to an increase in imports including crude oil and non-ferrous metals, which was partially offset by an increase in exports including steel and automobile parts. In 2022, Japan had a trade deficit of ¥19,971 billion. However, the impact of the global COVID-19 pandemic and potential international trade disruptions resulting from the conflict between Russia and Ukraine on exports, imports and the overall trade balance is highly uncertain.

The following tables set forth information relating to foreign trade for the years indicated. In these tables exports are stated on an f.o.b. basis and imports on a c.i.f. basis. Monetary figures are based on actual movements of goods as calculated by the Ministry of Finance. (This method of computation differs from that used in calculating balance of payments, in which both exports and imports are stated on an f.o.b. basis.)

Foreign Trade of Japan


	Value Index^(a)				Quantum Index^(a)				Unit Value Index^(a)				Terms of Trade^(b)
	Exports		Imports		Exports		Imports		Exports		Imports		Index
2017		103.5		96.1		105.9		102.9		97.8		93.4		104.7
2018		107.8		105.5		107.7		105.8		100.1		99.7		100.4
2019		101.7		100.2		103.0		104.6		98.8		95.9		103.0
2020		90.5		86.7		91.0		97.9		99.4		88.6		112.2
2021		109.9		108.3		101.9		102.8		107.8		105.3		102.6

(a)	Calendar year 2015=100.

(b)	Unit value index of exports divided by unit value index of imports, multiplied by 100.

Source: Japan Tariff Association, Ministry of Finance.

Composition of Japan’s Exports and Imports


	2017				2018					2019				2020				2021
							(yen amounts in billions)
JAPAN’S EXPORTS
Textile Products	¥	886	1.1	%	¥	901		1.1	%	¥	886	1.2	%	¥	754	1.1	%	¥	862	1.0	%
Metals and Metal Products		5,907	7.5			6,257		7.7			5,659	7.4			5,204	7.6			7,140	8.6
Machinery and Equipment:
Ships		1,322	1.7			1,368		1.7			1,493	1.9			1,142	1.7			1,050	1.3
Motor Vehicles		11,825	15.1			12,307		15.1			11,971	15.6			9,580	14.0			10,722	12.9
TV and Radio Receivers		107	0.1			117		0.1			116	0.2			89	0.1			96	0.1
Motorcycles		320	0.4			337		0.4			267	0.3			225	0.3			307	0.4
Scientific and Optical Instruments		2,416	3.1			2,314		2.8			2,130	2.8			1,968	2.9			2,322	2.8
Other^(a)		34,143	43.6			35,501		43.6			32,700	42.5			29,532	43.2			35,803	43.1

Total Machinery and Equipment		50,133	64.0			51,944		63.8			48,678	63.3			42,536	62.2			50,300	60.5
Chemicals		8,192	10.5			8,922		10.9			8,739	11.4			8,534	12.5			10,552	12.7
Foods and Beverages		645	0.8			741		0.9			754	1.0			790	1.2			992	1.2
Other Exports^(b)		12,524	16.0			12,714		15.6			12,216	15.9			10,581	15.5			13,244	15.9

Grand Total	¥	78,286	100.0	%	¥	81,479		100.0	%	¥	76,932	100.0	%	¥	68,399	100.0	%	¥	83,091	100.0	%

JAPAN’S IMPORTS
Foods and Beverages	¥	7,018	9.3	%	¥	7,247		8.8	%	¥	7,192	9.1	%	¥	6,679	9.8	%	¥	7,383	8.7	%
Raw Materials		4,725	6.3			4,992		6.0			4,861	6.2			4,682	6.9			6,936	8.2
Chemicals		7,567	10.0			8,550		10.3			8,163	10.4			7,859	11.6			9,769	11.5
Mineral Fuels:
Petroleum		7,155	9.5			8,906		10.8			7,969	10.1			4,646	6.8			6,929	8.2
Coal		2,570	3.4			2,812		3.4			2,528	3.2			1,708	2.5			2,801	3.3
Other^(c)		6,115	8.1			7,576		9.2			6,453	8.2			4,900	7.2			7,277	8.6

Total Mineral Fuel		15,840	21.0			19,294		23.3			16,951	21.6			11,254	16.5			17,007	20.0
Machinery and Equipment		24,490	32.5			25,952		31.4			25,319	32.2			22,973	33.8			26,766	31.5
Other Imports^(d)		15,740	20.9			16,669		20.2			16,114	20.5			14,564	21.4			17,014	20.0

Grand Total	¥	75,379	100.0	%	¥	82,703		100.0	%	¥	78,600	100.0	%	¥	68,011	100.0	%	¥	84,875	100.0	%

(a)	This category includes general machinery, electronic components including semiconductors and electronic equipment including electronic circuit.

(b)	This category includes raw materials, mineral fuels and vehicle parts.

(c)	This category includes liquid natural gas and petroleum products.

(d)	This category includes clothing and accessories thereof, non-ferrous metal and scientific and optical instruments.

Source: The Summary Report on Trade of Japan, Japan Tariff Association, Ministry of Finance.

Geographic Distribution of Japan’s Exports and Imports


	2018				2019				2020				2021				2022
	(yen amounts in billions)
JAPAN’S EXPORTS
Asia	¥	44,736	54.9	%	¥	41,327	53.7	%	¥	39,220	57.3	%	¥	48,158	58.0	%		¥55,411	56.4	%
China		15,898	19.5			14,682	19.1			15,082	22.1			17,984	21.6			19,007	19.4
(Asia NIES)		16,888	20.7			15,597	20.3			14,808	21.6			17,849	21.5			21,260	21.7
(ASEAN)		12,634	15.5			11,578	15.1			9,843	14.4			12,461	15.0			15,545	15.8
Oceania		2,402	2.9			2,053	2.7			1,688	2.5			2,194	2.6			2,816	2.9
Australia		1,886	2.3			1,580	2.1			1,295	1.9			1,675	2.0			2,173	2.2
North America		16,500	20.3			16,222	21.1			13,384	19.6			15,748	19.0			19,391	19.7
U.S.A.		15,470	19.0			15,255	19.8			12,611	18.4			14,832	17.8			18,259	18.6
Canada		1,029	1.3			968	1.3			773	1.1			917	1.1			1,132	1.2
Central and South America		3,399	4.2			3,221	4.2			2,285	3.3			3,086	3.7			3,737	3.8
Western Europe		9,389	11.5			9,010	11.7			7,651	11.2			8,851	10.7			10,742	10.9
EU^(a)		9,209	11.3			8,955	11.6			6,460	9.4			7,668	9.2			9,359	9.5
Central and Eastern Europe, Russia etc.		1,719	2.1			1,757	2.3			1,514	2.2			1,946	2.3			2,036	2.1
Russia		805	1.0			783	1.0			628	0.9			862	1.0			606	0.6
Middle East		2,434	3.0			2,356	3.1			1,809	2.6			2,052	2.5			2,781	2.8
Africa		900	1.1			984	1.3			848	1.2			1,055	1.3			1,272	1.3

Total	¥	81,479	100.0	%	¥	76,932	100.0	%	¥	68,399	100.0	%	¥	83,091	100.0	%		¥98,186	100.0	%

JAPAN’S IMPORTS
Asia	¥	39,218	47.4	%	¥	37,413	47.6	%	¥	34,678	51.0	%	¥	41,094	48.4	%		¥53,333	45.1	%
China		19,194	23.2			18,454	23.5			17,508	25.7			20,382	24.0			24,834	21.0
(Asia NIES)		7,859	9.5			7,231	9.2			6,706	9.9			8,293	9.8			10,919	9.2
(ASEAN)		12,399	15.0			11,757	15.0			10,678	15.7			12,483	14.7			17,697	15.0
Oceania		5,659	6.8			5,587	7.1			4,359	6.4			6,434	7.6			12,694	10.7
Australia		5,053	6.1			4,958	6.3			3,831	5.6			5,753	6.8			11,624	9.8
North America		10,318	12.5			9,935	12.6			8,631	12.7			10,430	12.3			13,915	11.8
U.S.A.		9,015	10.9			8,640	11.0			7,454	11.0			8,916	10.5			11,723	9.9
Canada		1,295	1.6			1,286	1.6			1,169	1.7			1,507	1.8			2,181	1.8
Central and South America		3,226	3.9			3,169	4.0			2,998	4.4			3,679	4.3			4,891	4.1
Western Europe		10,370	12.5			10,394	13.2			9,021	13.3			10,860	12.8			12,942	11.0
EU^(a)		9,718	11.8			9,722	12.4			7,832	11.5			9,453	11.1			11,375	9.6
Central and Eastern Europe, Russia etc.		2,546	3.1			2,333	3.0			1,843	2.7			2,375	2.8			2,974	2.5
Russia		1,723	2.1			1,561	2.0			1,145	1.7			1,552	1.8			1,958	1.7
Middle East		10,375	12.5			8,852	11.3			5,558	8.2			8,471	10.0			15,427	13.1
Africa		991	1.2			918	1.2			922	1.4			1,531	1.8			1,982	1.7

Grand Total	¥	82,703	100.0	%	¥	78,600	100.0	%	¥	68,011	100.0	%	¥	84,875	100.0	%		¥118,157	100.0	%

(a)	Data after February 2020 does not include the United Kingdom, as the United Kingdom exited the European Union (EU) on January 31, 2020.

Source: Press Releases, Ministry of Finance.

Balance of Payments

In 2021, Current Account surplus decreased to ¥15,488 billion, mainly due to an increase in Imports under the influence of the energy price hike observed in the latter half of the year.

Balance of Payments of Japan


	2017		2018		2019		2020		2021
	(in billions of yen)
Current Account	¥	22,778	¥	19,505	¥	19,251	¥	15,674	¥	15,488
Balance on Goods and Services		4,221		105		-932		-877		-2,562
Trade Balance		4,911		1,127		150		2,778		1,670
Exports (f.o.b.)		77,254		81,226		75,775		67,263		82,284
Imports (f.o.b.)		72,342		80,100		75,625		64,485		80,614
Services		-691		-1,021		-1,082		-3,655		-4,232
Primary Income^(a)		20,684		21,403		21,553		19,121		20,478
Secondary Income^(b)		-2,127		-2,003		-1,370		-2,570		-2,429
Capital Account		-280		-211		-413		-207		-420
Financial Account^(c)		18,811		20,136		24,862		13,807		10,753
Assets		-10,738		-3,279		-9,883		-15,575		-20,336
Liabilities		-29,549		-23,415		-34,745		-29,382		-31,089
Net Errors and Omissions		-3,687		842		6,024		-1,659		-4,315

(a)

(b)	Secondary Income shows balance of payments of provision of assets unaccompanied by consideration between residents and non-residents and includes such items as receipt and payment of financial support, donations, and gifts by the government or by the people.

(c)	Positive figures (+) show increases in net assets, negative figures (-) show decreases in net assets in “Financial Account”.

Source: Balance of Payments, Ministry of Finance.

Official Reserves Assets


As of December 31,	Gold^(a)		Foreign Currency Reserves		IMF Reserve Position		SDRs (Special Drawing Rights)		Other Reserve Assets		Total
	(in millions of dollar)
2018	$	31,531	$	1,208,958	$	11,464	$	18,484	$	538	$	1,270,975
2019		37,469		1,255,322		11,202		19,176		581		1,323,750
2020		46,526		1,312,160		15,147		20,215		632		1,394,680
2021		49,505		1,278,925		10,643		62,330		4,347		1,405,750
2022		49,295		1,103,907		10,817		59,275		4,282		1,227,576

(a)	The valuation of gold reflects marked-to-market values.

Source: International Reserves/Foreign Currency Liquidity, Ministry of Finance.

Foreign Exchange Rates

The following table sets forth the high, low and average daily interbank rate for the U.S. dollar against the yen in the Tokyo foreign exchange market for the years indicated.


	2018		2019		2020		2021		2022
Average (Central Rate)	¥	110.40	¥	108.99	¥	106.73	¥	109.89		¥131.57
High		114.55		112.24		112.18		115.45		150.48
Low		104.64		104.46		101.60		102.60		113.63

Source: Status of Transactions on Tokyo Foreign Exchange Market, Bank of Japan.

In recent months, the exchange rate for the U.S. dollar against the yen has sharply increased. As of February 10, 2023, the spot buying rate quoted on the Tokyo foreign exchange market as reported by the Bank of Japan at 5:00 p.m., Tokyo time, was ¥130.45 = $1.00, and the noon buying rate on February 3, 2023 for cable transfers in New York City payable in yen, as reported by the Federal Reserve Bank of New York, was ¥131.07 = $1.00.

Foreign exchange intervention is conducted to influence foreign exchange rates by buying and selling currencies in the foreign exchange market. In Japan, foreign exchange intervention is to be carried out under the authority of the Minister of Finance. The Bank of Japan conducts foreign exchange interventions on behalf of and at the instruction of the minister. When the minister deems it necessary to intervene in the foreign exchange market, the Ministry of Finance gives the Bank of Japan specific instructions for foreign exchange intervention. With respect to funding, as foreign exchange intervention involves buying and selling currencies, it requires funds such as Japanese yen and U.S. dollars. In Japan, the Foreign Exchange Fund Special Account (FEFSA), which falls under the jurisdiction of the Ministry of Finance, is used for foreign exchange intervention.

The total amount of foreign exchange intervention operations by the MOF for the period from August 30, 2022 through October 27, 2022 was ¥9,188.1 billion. Following such operations, Japan’s reserve assets totaled $1,194,568 million as of October 31, 2022, down $97,504 million from the end of August. As of December 31, 2022, Japan’s reserve assets totaled $1,227,576 million.

Foreign Direct Investment

The following table sets forth information regarding annual foreign direct investment in Japan and annual foreign direct investment abroad for the periods indicated.

Foreign direct investment in Japan (by industry)^(a)


	2017		2018		2019		2020		2021
	(in billions of yen)
Manufacturing (total)^(b)	¥	1,016.6	¥	1,188.5	¥	606.7	¥	331.3	¥	1,356.8
Food		28.8		9.8		58.2		-43.9		-66.6
Textile		2.8		-4.2		2.7		4.2		6.2
Lumber and pulp		-0.1		0.4		2.3		0.9		8.8
Chemicals and pharmaceuticals		15.1		298.6		120.9		135.3		1,471.3
Petroleum		19.3		1.3		-93.7		7.2		5.1
Rubber and leather		0.1		-0.8		—		-0.6		-0.8
Glass and ceramics		11.0		2.0		-17.3		25.4		-5.1
Iron, non-ferrous, and metals		-1.1		7.3		12.1		2.9		10.2
General machinery		172.9		25.7		-53.0		21.0		13.7
Electric machinery		419.5		529.5		327.5		157.6		235.0
Transportation equipment		362.4		180.3		244.0		27.9		-329.3
Precision machinery		-31.3		2.7		-10.1		9.4		5.7
Non-manufacturing (total)^(c)		32.8		-88.4		892.8		811.4		1,348.8
Farming and forestry		1.4		3.7		0.5		0.3		0.4
Fishery and marine products		—		1.7		0.9		1.2		1.1
Mining		18.5		3.3		4.2		1.5		5.4
Construction		3.4		-29.6		20.1		-1.4		9.8
Transportation		86.1		5.6		23.1		21.1		48.7
Communications		-74.9		-384.4		-30.7		13.8		424.6
Wholesale and retail		-599.6		-570.4		-680.9		-96.5		-240.3
Finance and insurance		171.1		702.1		1,301.1		743.3		929.7
Real estate		47.8		78.9		32.7		-28.9		-76.8
Services		270.7		10.5		137.8		87.7		61.3

Total	¥	1,049.4	¥	1,100.1	¥	1,499.5	¥	1,142.8	¥	2,705.7

(a)	Starting with transactions recognized in January 2014, the BOJ began using the Sixth Edition of “Balance of Payments and International Investment Position Manual” (BPM6) released by International Monetary Fund in 2008 to calculate the data provided in this table.

(b)	The total amounts for Manufacturing include other types of manufacturing not separately listed in the table and therefore are different from the sum of listed subcategories of manufacturing.

(c)	The total amounts for Non-manufacturing include other industries not separately listed in the table and therefore are different from the sum of listed subcategories of Non-manufacturing industries.

Source: Outward / Inward Direct Investment, breakdown by Region and Industry, Ministry of Finance.

Foreign direct investment in Japan (by region)^(a)


	2017		2018		2019		2020		2021
	(in billions of yen)
North America	¥	436.9	¥	642.1	¥	1,386.2	¥	318.5	¥	747.3
Asia		341.4		-6.6		553.3		535.1		1,899.6
Europe		-150.1		-125.4		-688.2		334.4		-259.0
Other regions		421.2		590.0		248.0		-45.3		317.8

Total	¥	1,049.4	¥	1,100.1	¥	1,499.5	¥	1,142.8	¥	2,705.7

(a)	Starting with transactions recognized in January 2014, the BOJ began using the Sixth Edition of “Balance of Payments and International Investment Position Manual” (BPM6) released by International Monetary Fund in 2008 to calculate the data provided in this table.

Source: Outward / Inward Direct Investment, breakdown by Region and Industry, Ministry of Finance.

Foreign direct investment abroad (by industry)^(a)


	2017		2018		2019		2020		2021
	(in billions of yen)
Manufacturing (total)^(b)	¥	6,209.9	¥	6,365.9	¥	11,344.9	¥	1,588.4	¥	4,192.2
Food		1,137.7		65.7		581.9		1,619.7		360.0
Textile		91.6		184.5		70.7		41.7		26.1
Lumber and pulp		44.8		171.9		138.7		255.7		50.8
Chemicals and pharmaceuticals		1,047.4		1,617.8		4,593.9		-3,449.0		1,101.5
Petroleum		21.1		67.7		20.5		25.0		23.0
Rubber and leather		105.9		192.4		213.1		79.9		-46.3
Glass and ceramics		170.3		222.8		233.9		144.0		27.6
Iron, non-ferrous, and metals		415.8		414.1		443.5		197.6		137.5
General machinery		1,036.6		834.9		714.4		-214.5		601.0
Electric machinery		684.7		1,036.2		1,391.7		1,420.5		1,452.8
Transportation equipment		947.0		1,219.6		2,437.3		1,205.8		145.7
Precision machinery		325.0		128.7		306.1		122.1		140.2
Non-manufacturing (total)^(c)		12,251.3		9,643.5		14,013.7		8,626.3		11,917.8
Farming and forestry		-12.8		8.0		6.2		39.1		35.7
Fishery and marine products		5.7		7.4		3.7		0.3		-5.5
Mining		124.0		1,062.6		1,060.1		267.4		8.6
Construction		173.6		258.3		202.5		103.0		82.7
Transportation		133.3		242.4		239.9		122.8		137.5
Communications		2,636.5		4,179.4		636.0		-2,629.2		937.6
Wholesale and retail		3,194.1		1,508.7		6,311.8		3,709.0		3,517.3
Finance and insurance		3,691.8		2,826.4		4,018.4		5,500.5		5,858.8
Real estate		725.1		424.5		1,173.6		215.4		377.7
Services		1,013.8		-1,456.5		-189.7		610.0		274.3

Total	¥	18,461.2	¥	16,009.4	¥	25,358.6	¥	10,214.7	¥	16,110.0

(a)	Starting with transactions recognized in January 2014, the BOJ began using the Sixth Edition of “Balance of Payments and International Investment Position Manual” (BPM6) released by International Monetary Fund in 2008 to calculate the data provided in this table.

(b)	The total amounts for Manufacturing include other types of manufacturing not separately listed in the table and therefore are different from the sum of listed subcategories of manufacturing.

(c)	The total amounts for Non-manufacturing include other industries not separately listed in the table and therefore are different from the sum of listed subcategories of Non-manufacturing industries.

Source: Outward / Inward Direct Investment, breakdown by Region and Industry, Ministry of Finance.

Foreign direct investment abroad (by region)^(a)


	2017		2018		2019		2020		2021
	(in billions of yen)
North America	¥	5,244.5	¥	2,192.4	¥	5,551.2	¥	5,916.7	¥	6,609.0
Asia		4,480.9		5,570.2		5,540.7		3,392.5		5,052.9
Europe		6,275.8		5,157.9		11,603.4		-1,705.9		4,180.8
Other regions		2,460.0		3,088.8		2,663.3		2,611.4		267.3

Total	¥	18,461.2	¥	16,009.4	¥	25,358.6	¥	10,214.7	¥	16,110.0

(a)	Starting with transactions recognized in January 2014, the BOJ began using the Sixth Edition of “Balance of Payments and International Investment Position Manual” (BPM6) released by International Monetary Fund in 2008 to calculate the data provided in this table.

Source: Outward / Inward Direct Investment, breakdown by Region and Industry, Ministry of Finance.

FINANCIAL SYSTEM

The Bank of Japan and Monetary Policy

^(a)

assets as follows: (1) purchase JGBs so that their amount outstanding will increase at an annual pace of about ¥80 trillion, (2) purchase ETFs and J-REITs so that their amounts outstanding will increase at an annual pace of about ¥3 trillion (decided further expansion to about ¥3.3 trillion and to about ¥6 trillion in April 2016 and July 2016, respectively) and about ¥90 billion, respectively, and (3) maintain the amounts outstanding of commercial paper and corporate bonds at about ¥2.2 trillion and about ¥3.2 trillion, respectively. In September 2016, the BOJ announced a new framework for strengthening monetary easing by adopting a program of “quantitative and qualitative monetary easing with yield curve control”, or QQE with yield curve control, under which the BOJ (i) set guidelines for market operations that specify (1) a short-term policy interest rate (set at the minus 0.1% level adopted in January 2016) and (2) a target level of a long-term interest rate (target yield of the 10-year JGB set at around 0%, to be facilitated through continued BOJ purchases of JGBs) and (ii) introduced new tools of market operations so as to control the yield curve smoothly, consisting of (1) outright purchases of JGBs with yields designated by the BOJ and (2) fixed-rate funds-supplying operations for a period of up to ten years. With regard to asset purchase except for JGB purchases, the BOJ also set the following guidelines: (i) purchase ETFs and J-REITs so that their amounts outstanding will increase at an annual pace of about ¥6 trillion and about ¥90 billion, respectively, and (ii) maintain the amounts outstanding of commercial paper and corporate bonds at about ¥2.2 trillion and ¥3.2 trillion, respectively. Finally, the BOJ announced its “inflation-overshooting commitment”, under which it will continue with QQE with yield curve control, aiming to achieve the price stability target of 2%, as long as it is necessary for maintaining the target in a stable manner, and will continue to expand the monetary base until the year-on-year rate of increase in the observed CPI (all items less fresh food) exceeds the price stability target of 2% and stays above the target in a stable manner. In July 2018, to maintain strong monetary easing, the BOJ decided to strengthen the framework for continuous strong monetary easing. The BOJ introduced forward guidance for policy rates and announced its intent to maintain the current extremely low levels of short- and long-term interest rates for an extended period of time, taking into account uncertainties regarding economic activity and prices including the effects of the consumption tax hike in October 2019. Also, it was announced that the yields may move upward and downward to some extent mainly depending on developments in economic activity and prices^(b). In addition, with regard to ETFs and J-REIT unit purchases, the BOJ announced that it may increase or decrease the amount of purchases depending on market conditions. Further, in April 2019, to make its policy to persistently continue with strong monetary easing clearer, the BOJ clarified its forward guidance for policy rates: The BOJ intends to maintain the current extremely low levels of short- and long-term interest rates for an extended period of time, taking into account uncertainties regarding economic activity and prices including developments in overseas economies and the effects of the consumption tax hike.

Furthermore, on March 16, 2020, in response to the adverse impact of the global spread of COVID-19 on the Japanese economy, the BOJ announced its plan to further strengthen its monetary easing policy, including (1) ensuring ample supply of yen funding through active purchases of JGBs and the following measures as well as providing U.S. dollar liquidity, (2) the introduction of special operations to support companies under which the BOJ will extend zero-interest rate loans collateralized by corporate debt as well as increasing the upper limit for its purchases of commercial paper and corporate bonds by ¥2 trillion until the end of September 2020, resulting in an upper limit for its balance of outstanding commercial paper and corporate bonds of ¥3.2 trillion and ¥4.2 trillion, respectively and (3) an increase in the upper limit for its purchases of ETFs and J-REITs to ¥12 trillion and ¥180 billion, respectively. On April 27, 2020, given the increasingly severe situation due to impact of the spread of COVID-19, the BOJ decided to further enhance monetary easing through (1) an increase in purchases of commercial paper and corporate bonds, to be conducted through the end of September 2020, setting the maximum amounts of additional purchase to ¥7.5 trillion for each asset, (2) strengthening the BOJ’s Special Funds-Supplying Operations to Facilitate Financing in Response to the Novel Coronavirus (COVID-19), which were introduced and became effective in March 2020, and (3) further active purchases of JGBs and treasury discount bills. On June 18, 2021, the BOJ extended the duration of the Special Program to Support Financing in Response to the COVID-19 and the duration of purchase of commercial paper and corporate bonds, with an upper limit on the amount outstanding of about ¥20 trillion in total, until the end of March, 2022. On December 17, 2021, the BOJ announced that it would further extend the duration of a part of the Special

^(b)	In case of rapid increases in the yields, the BOJ will purchase JGBs promptly and appropriately.

Funds-Supplying Operations to Facilitate Financing in Response to COVID-19 until September 2022 but plans to gradually decrease the balance of commercial paper and corporate bonds to the pre-pandemic level (approximately ¥2 trillion yen and ¥3 trillion yen, respectively).

The following table sets forth the principal economic indicators relating to monetary policy from 2018 through 2022.


			Monetary Base				Money Stock				Loans and Bills Discounts Domestically Licensed Banks
	Current Account Balances^(a)		Total^(a)		Annual % Change		Total^(a)		Annual % Change		Total^(a)		Annual % Change
							(yen amounts in billions)
2018		382,178		491,499		7.3		1,002,456		2.9		488,331		2.8
2019		396,404		509,008		3.6		1,026,199		2.4		500,517		2.5
2020		438,051		555,229		9.0		1,092,626		6.5		524,164		4.7
2021		521,752		643,496		16.2		1,162,693		6.5		536,911		2.4
2022		528,008		653,203		1.6		1,201,203		3.3		549,437		2.3

(a)	Average amounts outstanding.

Source: Bank of Japan Statistics, Bank of Japan.

Government Financial Institutions

The activities of private institutions are supplemented by a number of financial institutions under government supervision, the appointment of whose senior officials is subject to approval by the government and whose funds are supplied principally or partially by the government. Among these are Japan Finance Corporation (“JFC”), the successor to National Life Finance Corporation (“NLFC”), Japan Finance Corporation for Small and Medium Enterprise (“JASME”), and Agriculture, Forestry and Fisheries Finance Corporation (“AFC”), whose main purposes are to contribute to the improvement of the quality of the national life. They also include Japan Bank for International Cooperation (“JBIC”) and The Okinawa Development Finance Corporation (“ODFC”),

whose purposes are to supplement private financing in their respective fields of activity, and Development Bank of Japan Inc. (“DBJ”) and The Shoko Chukin Bank (“SCB”), which will be privatized.

The central government has been steadily promoting reform of governmental financial institutions. The “Outline of Administrative Reforms” decided by the Cabinet on December 1, 2000, requires that the businesses and organizational forms of all special public institutions, which include governmental financial institutions, undergo a thorough review. Pursuant to the Act on Promotion of Administrative Reform for Realization of Small and Efficient Government (the “Administrative Reform Promotion Act”), which was enacted on May 26, 2006, (1) the former Development Bank of Japan was succeeded to by DBJ as of October 1, 2008, which is currently wholly owned by the Japanese government and will be privatized, (2) the international financial operations of JBIC, together with the functions of NLFC, JASME, AFC were transferred to JFC as of October 1, 2008, and the overseas economic cooperation operations of JBIC were transferred to JICA, and (3) as of October 1, 2008, Japan Finance Corporation for Municipal Enterprises was succeeded by Japan Finance Organization for Municipalities, which is funded by local governments. Each of these measures was implemented through individual laws that were enacted in 2007, pursuant to which these successor institutions were formed on October 1, 2008.

With regard to (1) above, as originally enacted, the Development Bank of Japan Inc. Act (Act No. 85 of 2007), as amended (the “DBJ Act”), contemplated full privatization of DBJ over a period of five to seven years from its establishment on October 1, 2008. During that time period, the DBJ Act (as originally enacted) provided that the Japanese government would dispose of all of the common stock of DBJ that it currently owns (the “full privatization”), and that steps would be taken to abolish the DBJ Act promptly after the full privatization. On June 26, 2009, the Japanese Diet approved the Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 67 of 2009) (the “2009 Amendment Act”), which, as part of the Japanese government’s response to economic and financial crises, enables the Japanese government to strengthen DBJ’s financial base through capital injections up to the end of March 2012. In addition, under the Amendment Act, the targeted timing for the full privatization of DBJ has been extended to approximately five to seven years from April 1, 2012. Further, the Amendment Act provides that the Japanese government is to review the organization of DBJ, including the way of the Japanese government’s holding of the DBJ shares, by the end of fiscal year 2011, and until such time, the Japanese government shall not be disposing of the DBJ’s shares held by it. Additionally, on May 2, 2011, in order to address the Great East Japan Earthquake of March 11, 2011, the Japanese Diet approved the Act for Extraordinary Expenditure and Assistance to Cope with the Great East Earthquake (Act No. 40 of 2011) (the “Extraordinary Expenditure Act”). The Extraordinary Expenditure Act enables to the Japanese government to strengthen DBJ’s financial base through capital injection through March 2015 so that DBJ can smoothly implement its crisis response operations. In addition, under Extraordinary Expenditure Act, the targeted timing for the full privatization of DBJ has been extended to approximately five to seven years from April 1, 2015. Further, the Extraordinary Expenditure Act provides that the Japanese government is to review the organization of DBJ, including the way of the Japanese government’s holding of the DBJ’s shares by the end of fiscal year 2014, and until such time, the Japanese government shall not dispose of the DBJ’s shares held by it. On May 13, 2015, the Japanese Diet approved the Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 23 of 2015) (the “2015 Amendment Act”), under which the specific targeted timing for the full privatization of DBJ has been withdrawn and taking into consideration the current business environment in the private financial sector, DBJ, utilizing its investment and loan functions, is to take measures necessary for implementing the its crisis response operations and supply of growth capital—that is, DBJ is to take all possible measures to supply funds to deal with large-scale disasters, economic crises and so forth, and to promote the supply of growth capital to revitalize regional economies and to reinforce the competitiveness of enterprises. In order to assure the sufficient implementation of the necessary operations, under the 2015 Amendment Act, the Japanese government shall maintain its stake in excess of one-third for DBJ’s crisis response operations, and one half or more for DBJ’s special investment operations, for as long as the government shall take such measures. Furthermore, on May 22, 2020, the Act for Partial Amendment of the Development Bank of Japan Inc. Act (Act No. 29 of 2020) was promulgated, under which, the time limit of DBJ’s special investment operations has been extended by five years.

With regard to (2) above, The Japan Bank for International Cooperation Act (the “JBIC Act”) was passed into law on April 28, 2011 to spin off the Japan Bank for International Cooperation Operations from the domestic financial operations of the Japan Finance Corporation. Pursuant to the JBIC Act, Japan Bank for International Cooperation was newly established on April 1, 2012.

Private Financial Institutions

GOVERNMENT FINANCE

Revenues, Expenditures and Budgets

•

Halving the primary deficit of the national and local governments to GDP ratio by JFY 2015 from the ratio in JFY 2010. (This target has been achieved.)

•

Achieving a primary surplus of the national and local governments to GDP ratio by JFY 2020; and

•

Steadily reducing the public debt to GDP ratio.

These targets were firmly maintained in the “Basic Policies for the Economic and Fiscal Management and Reform 2015” decided by the Cabinet on June 30, 2015, including “The Plan to Advance Economic and Fiscal Consolidation” , or the fiscal consolidation plan, which the government believes would be an effective and concrete plan for achieving the primary surplus target by JFY2020, covering a five-year period (JFY2016-JFY2020). Under the fiscal consolidation plan, the government was committed to assessing the progress of reforming expenditure and revenue measures by using several benchmarks. However, the actual improvement in the primary balance was slower than the estimate under the “Plan to Advance Economic and Fiscal Revitalization”, or the Revitalization Plan, owing to more moderate growth in tax revenue than the initial assumption due to a decline in economic growth, as well as the impact of the postponement of the consumption tax rate hike to 10% from 8%, and the addition of supplementary budgets. Furthermore, in the “New Economic Policy Package”, the government revised the purposes of use of the tax revenue generated from the consumption tax rate hike in October 2019 to ensure stable fiscal resources in preparation for the human resources development revolution. Due to these factors, it was not possible to achieve the primary surplus target by JFY 2020.

In order to achieve the primary surplus target, the government will implement steadily the expenditure reforms on all fronts in parallel with economic revitalization.

On April 7, 2020, the Prime Minister of Japan at the time, ABE Shinzo, announced Emergency Economic Measures to Cope with COVID-19 pandemic, which were further revised on April 20, 2020, including (i) measures to prevent the spread of infection and secure resources and infrastructure for medical treatment, (ii) measures to protect employment and support businesses including ensuring the availability of interest-free, unsecured loans, deferral of national taxes and social security premiums for affected businesses and cash payments to all residents in Japan and small and medium-sized businesses affected by COVID-19, (iii) demand stimulus measures to be implemented after the pandemic is contained targeting affected industries such as tourism, transportation, food services and entertainment as well as regional economic development, (iv) measures to develop a resilient economic structure including support for development of business supply chains, support for agricultural exports and domestic supply and promotion of digital technologies in education and business and

(v) securing contingency funds to address COVID-19. On December 8, 2020, the Prime Minister of Japan at the time, SUGA Yoshihide, announced Comprehensive Economic Measures to Secure People`s Lives and Livelihoods toward Relief and Hope, including (i) containment measures for COVID-19 pandemic, (ii) measures to promote economic structural change and positive cycles for Post-Corona era, (iii) measures to secure safety and relief, including disaster prevention and mitigation and promotion of national land toughening and (iv) proper and timely implementation of the contingency funds for measures against COVID-19. In connection with these measures, the Diet approved three supplementary budgets for JFY 2020 in April and June 2020 and January 2021. The total expenditures from the general account increased to ¥175.7 trillion with these supplementary budgets. The expenditures increases in the supplementary budgets were largely financed through issuance of government bonds.

The fiscal and financial operations of the government and its agencies are budgeted and recorded in the following three sets of accounts:

•

General Account. The general account is used primarily to record operations in basic areas of governmental activity.

•

Special Accounts. The accounts of the central government consist of the general account and special accounts. Special accounts can be set up to carry out specific projects, to manage specific funds, and for other purposes. Special accounts can be set up when the government (i) implements a specific program such as insurance and public works, (ii) possesses and manages special funds such as Fiscal Loan Program Funds and Foreign Exchange Funds, and (iii) uses a certain revenue to secure a special expenditure and thus needs to deal with such revenue and expenditure on a separate basis from the general revenue and expenditure such as Local Allocation and Local Transfer Tax and Government Bonds Consolidation Funds. As of September 2022, the government had 13 special accounts.

•

Government-Affiliated Agencies. The government-affiliated agencies are government-owned corporations which consist of three financial corporations.

The following tables set forth information with respect to the General Account, the Special Accounts and the Government Affiliated Agencies for JFY 2016 through JFY 2021, and the budget for JFY 2022.

Summary of Consolidated General and Special Accounts^(a)


	JFY 2016		JFY 2017		JFY 2018		JFY 2019		JFY 2020		JFY 2021		JFY 2022 Initial Budget^(c)
	(in billions of yen)
REVENUES
Total Revenues, General Account	¥	102,774	¥	103,644	¥	105,697	¥	109,162	¥	184,579	¥	169,403	¥	107,596
Total Revenues, Special Accounts		410,161		386,487		381,177		386,552		417,561		455,554		470,533
Less: Inter-Account Transactions^(b)		253,522		245,402		243,007		244,423		248,863		302,306		306,597

Total Consolidated Revenues	¥	259,413	¥	244,729	¥	243,868	¥	251,292	¥	353,277	¥	322,651	¥	271,533


EXPENDITURES
Total Expenditures, General Account	¥	97,541	¥	98,116	¥	98,975	¥	101,366	¥	147,597	¥	144,650	¥	107,596
Total Expenditures, Special Accounts		395,361		374,150		368,936		374,170		404,519		441,081		467,282
Less: Inter-Account Transactions^(b)		251,842		242,877		241,249		242,631		246,270		300,383		305,170

Total Consolidated Expenditures	¥	241,061	¥	229,389	¥	226,661	¥	232,905	¥	305,846	¥	285,348	¥	269,708

Surplus of Consolidated Revenues over Consolidated Expenditures	¥	18,353	¥	15,340	¥	17,206	¥	18,387	¥	47,431	¥	37,303	¥	1,824

(a)	Because of the manner in which the government accounts are kept, it is not practicable to show a consolidation of the Government Affiliated Agencies with the General and Special Accounts.

(b)	Inter-Account Transactions include transfers between the General Account and the Special Accounts, transfers between the Special Accounts, and transfers between sub- accounts of the Special Accounts.

(c)	As of the date of this registration statement, details for the revised budget for JFY 2022 are not available. For information in respect of the General Account and Special Accounts for the revised budget for JFY 2022, refer to the tables on pages 38 and 39.

Source: Budget, Ministry of Finance.

General Account


	JFY 2016		JFY 2017		JFY 2018		JFY 2019		JFY 2020		JFY 2021		JFY 2022 Revised Budget^(a)
	(in billions of yen)
REVENUES
Tax and Stamp Revenues	¥	55,469	¥	58,787	¥	60,356	¥	58,442	¥	60,822	¥	67,038	¥	68,359
Carried-over Surplus		3,945		5,232		5,528		6,723		7,796		36,981		2,326
Government Bond Issues		38,035		33,555		34,395		36,582		108,554		57,655		62,479
Income from Operations		47		50		51		51		46		61		51
Gains from Deposition of Assets		384		278		268		226		293		319		306
Miscellaneous Receipts		4,895		5,741		5,098		7,139		7,068		7,349		5,698

Total Revenues	¥	102,774	¥	103,644	¥	105,697	¥	109,162	¥	184,579	¥	169,403	¥	139,220

EXPENDITURES
Local Allocation Tax Grants, etc.	¥	15,339	¥	15,567	¥	16,026	¥	16,032	¥	16,256	¥	19,558	¥	17,513
National Debt Service		22,086		22,521		22,529		22,286		22,326		24,589		24,072
Social Security		32,208		32,521		32,569		33,501		42,998		50,161		40,939
Public Works		6,710		6,912		6,913		7,610		8,413		8,600		8,053
Education and Science		5,598		5,703		5,748		5,911		9,194		7,956		8,813
National Defense		5,150		5,274		5,475		5,627		5,505		6,014		5,810
Former Military Personnel Pensions		335		286		241		202		169		140		122
Economic Assistance		743		651		642		653		763		669		847
Food Supply		1,140		1,181		1,122		1,121		1,498		1,772		1,761
Energy		973		969		973		1,049		1,027		1,267		2,197
Promotion of SMEs		430		319		525		779		16,257		9,944		1,419
Miscellaneous		6,830		6,211		6,212		6,596		23,190		13,980		15,913
Contingency funds for measures against the COVID-19 and soaring crude oil and commodity prices		—		—		—		—		—		—		9,860
Contingency funds for Economic Emergency including the impact from the Ukraine crisis		—		—		—		—		—		—		1,000
Contingencies		—		—		—		—		—		—		900

Total Expenditures	¥	97,542	¥	98,116	¥	98,975	¥	101,366	¥	147,597	¥	144,650	¥	139,220

Surplus of Revenues over Expenditures	¥	5,232	¥	5,528	¥	6,723	¥	7,796	¥	36,981	¥	24,754	¥	—

(a)	As revised to reflect the revised budget for JFY 2022 approved by the Diet on December 2, 2022.

Source: Budget, Ministry of Finance.

Special Accounts


	JFY 2016				JFY 2017				JFY 2018				JFY 2019				JFY 2020				JFY 2021				JFY 2022 Revised Budget^(a)
	Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.
	(in billions of yen)
Fiscal Investment and Loan Program	¥	42,124	¥	41,166	¥	28,207	¥	27,409	¥	26,070	¥	25,175	¥	28,484	¥	27,873	¥	52,366	¥	51,967	¥	35,860	¥	35,346	¥	36,064	¥	36,027
Government Bonds Consolidation Fund		198,994		195,911		191,227		188,134		186,158		183,082		186,970		183,878		188,973		185,921		239,702		236,623		237,174		237,174
Foreign Exchange Fund		2,948		70		2,808		70		3,101		85		3,599		160		3,133		234		2,475		177		2,491		1,147
Local Allocation and Local Transfer Tax		53,577		52,590		52,517		51,780		52,483		51,596		51,985		51,488		51,978		50,829		55,326		53,632		53,436		51,966
Measure for Energy		9,608		9,082		10,191		9,742		10,613		10,158		10,887		10,377		11,155		10,618		11,649		10,914		14,053		14,053
Pensions		90,142		85,786		90,158		87,413		91,700		89,464		93,209		90,919		94,591		91,804		96,376		92,725		97,045		97,045
Stable Supply of Foodstuff		940		820		979		842		970		814		968		851		926		821		980		913		1,316		1,314
Debt Management of National Forest and Field Service		329		329		342		342		349		349		356		356		363		363		360		360		353		353
Trade Reinsurance^(b)		37		12		—		—		—		—		—		—		—		—		—		—		—		—
Automobile Safety		606		426		625		431		672		451		684		500		651		434		559		395		520		449
Labor Insurance		6,296		5,941		6,040		5,656		6,073		5,735		6,371		5,928		10,589		9,519		10,486		8,610		8,855		8,034
Reconstruction from the Great East Japan Earthquake		4,105		2,961		2,924		2,188		2,532		1,868		2,587		1,677		2,498		1,854		1,430		1,112		922		922
Others		456		267		469		143		456		158		452		164		338		153		353		273		300		264

Total Revenues and Expenditures^(c)	¥	410,162	¥	395,361	¥	386,487	¥	374,150	¥	381,177	¥	368,936	¥	386,552	¥	374,170	¥	417,561	¥	404,519	¥	455,554	¥	441,081	¥	452,529	¥	448,751

(a)	As revised to reflect the revised budget for JFY 2022 approved by the Diet on December 2, 2022.

(b)	The account was abolished effective JFY 2017.

(c)	Without adjustment for inter-account transactions. Total Revenues and Expenditures may differ from the actual totals of the listed accounts due to rounding.

Source: Budget, Ministry of Finance.

Government Affiliated Agencies


	JFY 2016				JFY 2017				JFY 2018				JFY 2019				JFY 2020				JFY 2021				JFY 2022 Initial Budget^(a)
	Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.		Rev.		Exp.
	(in billions of yen)
Total	¥	1,065	¥	907	¥	1,130	¥	962	¥	1,231	¥	1,064	¥	1,265	¥	1,064	¥	1,096	¥	804	¥	996	¥	665	¥	2,005	¥	2,519

(a)	There were no revisions to the relevant information for Government Affiliated Agencies in the revised budget for JFY 2022 approved by the Diet on December 2, 2022.

Source: Budget, Ministry of Finance.

Tax Structure

The central government derives tax revenues (including stamp revenues) through taxes on income, consumption and property, etc. The taxes on income, consumption and property (including stamp revenues, etc.) account for 54.1%, 40.9% and 5.1%, respectively, of the total central government taxes and stamp revenues in the JFY 2022 initial national budget.

Comprehensive Reform of Social Security and Tax. Japan’s fiscal conditions face challenges, with its tax revenues covering about 49% of its expenditures under the revised budget for JFY 2022, and with the ratio of long-term debt outstanding of central and local governments to gross domestic product having reached 218% at the end of JFY 2020. The ratio of long-term debt outstanding of central and local governments to gross domestic product is expected to be increased to 223% at the end of JFY 2021 and further increased to 225% at the end of JFY 2022. Such ratio may further increase in subsequent fiscal years due to the negative impact of COVID-19 on gross domestic product and additional government debt issued in connection with stimulus measures implemented in response to COVID-19. See also “Japan’s Public Debt” below. The Government of Japan seeks to tackle these fiscal challenges through the “comprehensive reform of social security and tax”, which was approved by the Diet in August 2012, and thereby maintain the market’s and the international community’s confidence in Japan and build the foundation for stable economic growth. In the reform, the government planned to set aside consumption tax revenues for social security payments, and, on the condition that the economic situation improves, gradually increase the consumption tax rate to 8% in April 2014 and to 10% in October 2015. In accordance with the plan, the consumption tax rate was increased to 8% in April 2014. However, the government decided to postpone the implementation date of the further consumption tax hike to 10% from October 1, 2015 to April 1, 2017, as a result of taking comprehensive account of the economic condition and other factors, and on June 1, 2016, the then-current Japan Prime Minister ABE Shinzo announced a plan to further postpone the consumption tax hike to 10% from April 1, 2017, to October 1, 2019. The consumption tax rate has been increased to 10% since October 1, 2019.

Fiscal Investment and Loan Program

The Fiscal Investment and Loan Program (the “FILP”) plan is formulated at the same pace as the General Account budget. The FILP plan details the allocation of public funds to various special accounts, government affiliated agencies, local governments, public corporations and other public institutions.

Under the FILP plan, funds are supplied to government-related entities such as public corporations, government affiliated agencies, special accounts and local governments. The total amount of the initial plan for JFY 2023 is ¥16,269 billion. The sources of funds for the initial plan in JFY 2023 are Fiscal Loan (¥12,710 billion), Industrial Investment (¥430 billion), Government-Guaranteed domestic bonds (¥1,783 billion), Government-Guaranteed foreign bonds (¥1,307 billion) and Government-Guaranteed long-term borrowings in foreign currencies (¥40 billion). The Fiscal Loan utilizes the Fiscal Loan Fund consisting of funds procured through the issuance of FILP bonds and reserves or surplus funds deposited from government special accounts to provide long-term, fixed and low-interest loans to such entities as special government accounts, local governments, government-affiliated agencies and incorporated administrative agencies.

The following table (the “FILP Classification Table by Purpose”) shows the uses of funds allocated under the initial plan for the periods indicated.

(Note)

The FILP Classification Table by Purpose has been prepared and published to specify fields where FILP contributes to the national economy or livelihood. Classification of the table had been almost the same

from JFY 1961 to JFY 2014. However, since the classification became to be inappropriate for reflecting realities of recent FILP-target projects, it was revised in JFY 2015 by sorting out the classification or putting some classifications together.


Old classification	JFY 2011		JFY 2012		JFY 2013		JFY 2014
	(in billions of yen)
Housing	¥	578	¥	923	¥	929	¥	942
Living environment		2,725		2,713		2,805		2,306
Social welfare		550		743		703		920
Education		1,176		1,232		1,522		1,278
Small and medium enterprises		3,627		4,323		4,197		3,861
Agriculture, forestry and fisheries		345		373		407		476
National land conservation/disaster recovery		180		645		348		477
Road construction		2,248		2,813		2,939		2,270
Transportation/communications		408		384		519		629
Regional development		467		447		372		259
Industry/technology		625		2,015		2,005		1,448
Trade/economic cooperation		1,978		1,039		1,644		1,313

Total	¥	14,906	¥	17,648	¥	18,390	¥	16,180


New classification	JFY 2014		JFY 2015		JFY 2016		JFY 2017		JFY 2018		JFY 2019		JFY 2020		JFY 2021		JFY 2022		JFY 2023
	(in billions of yen)
SMEs and micro enterprises	¥	3,750	¥	3,448	¥	3,182	¥	2,969	¥	2,912	¥	2,997	¥	2,903	¥	14,521	¥	3,567		¥4,972
Agriculture, forestry and fisheries		318		280		322		339		573		604		590		759		699		796
Education		1,134		1,038		1,055		932		943		930		898		4,859		5,671		805
Welfare/medical care		772		773		811		670		627		541		477		2,042		1,044		436
Environment		50		61		61		64		61		33		54		57		93		101
Industry/innovation		834		939		864		822		919		1,019		1,166		1,213		1,009		1,052
Housing		849		742		621		541		461		546		521		792		815		768
Social capital		4,467		3,999		3,087		5,093		4,761		3,745		3,752		3,065		2,634		2,921
Overseas investment and loans		1,547		1,378		2,000		2,455		2,003		1,857		2,039		2,029		2,472		3,543
Others		2,460		1,964		1,477		1,243		1,204		849		821		11,568		884		875

Total	¥	16,180	¥	14,622	¥	13,481	¥	15,128	¥	14,463	¥	13,119	¥	13,220	¥	40,906	¥	18,886		¥16,269

DEBT RECORD

There has been no default in the payment of interest or principal of any internal Japanese government obligation since the establishment of the modern Japanese state in 1868 or of any external Japanese government obligation within a period of 20 years prior hereto.

JAPAN’S PUBLIC DEBT

Outstanding General Bonds reached ¥991 trillion at the end of JFY 2021. The amount of public bonds issued by the Japanese government as a percentage of its general account total revenues was 46.0% under the revised budget for JFY 2021 and 35.9% under the revised budget for JFY 2022. The amount of General Bond issuances in the JFY 2022 revised budget is ¥39,627 billion and is less than the JFY 2021 revised budget level of ¥65,655 billion.

Summary of Japan’s Public Debt


	Funded				Floating Internal
At the end of JFY	Internal		External		Floating Internal
	(in billions of yen)		(in thousands of yen)		(in billions of yen)
2017	¥	934,321		—	¥	153,492
2018		954,863		—		148,491
2019		965,926		—		148,614
2020		993,542		—		222,921
2021		1,037,735		—		203,572

As of March 31, 2022 Japan had guaranteed payment of principal and interest of various internal yen obligations in the aggregate principal amount of ¥24,081 billion and of various external obligations aggregating the equivalent of ¥6,990 billion.

The following table sets forth the aggregate annual payments of principal in respect of the direct internal funded debt of Japan outstanding as of March 31, 2022 for the periods indicated.

Principal Payments on Direct Funded Debt of Japan


JFY	Internal
	(in billions of yen)
2022	¥	111,368
2023		114,141
2024		74,373
2025		80,834
2026 to 2060		656,977

Total	¥	1,037,694

INTERNAL DEBT

Direct Debt of the Japanese Government

Funded Debt


Title and Interest Rate	Year of Issue	Year of Maturity	Principal Amounts Outstanding as of March 31, 2022 (in millions)
1. Bonds
Interest-Bearing Treasury Bond — 40 years, 14 Series (0.4-2.4%)	2007-2022	2048-2061	¥	35,098,500
Interest-Bearing Treasury Bond — 30 years, 73 Series (0.3-2.9%)	1999-2022	2029-2051		151,208,242
Interest-Bearing Treasury Bond — 20 years, 124 Series (0.2-2.4%)	2002-2022	2022-2041		286,009,942
Interest-Bearing Treasury Bond — 15 years, 4 Series (variable rate)	2007-2008	2022-2023		2,837,800
Interest-Bearing Treasury Bond — 10 years, 43 Series (0.1-0.9%)	2012-2022	2022-2031		320,319,156
Interest-Bearing Treasury Bond for Individual Investors — 10 years, 110 Series (variable rate)	2012-2022	2022-2032		9,615,467
Inflation-Indexed Bonds —10 years, 10 Series (0.005-0.2%)	2013-2022	2023-2031		11,465,067
Interest-Bearing Treasury Bond — 5 years, 19 Series (0.005-0.1%)	2017-2022	2022-2026		136,099,300
Interest-Bearing Treasury Bond for Individual Investors — 5 years, 60 Series (0.05%)	2017-2022	2022-2027		946,956
Interest-Bearing Treasury Bond for Individual Investors — 3 years, 36 Series (0.05%)	2019-2022	2022-2025		1,796,212
Interest-Bearing Treasury Bond — 2 years, 24 Series (0.005-0.1%)	2020-2022	2022-2024		71,542,000
6% Bereaved Family Treasury Bond, 7 Series	2013-2019	2022-2028		1
6% Repatriation Treasury Bond, 1 Series	2014	2024		0
Non-interest Special Benefit Treasury Bond, 1 Series	2013	2023		1
Non-interest Special Benefit Treasury Bond IV, 2 Series	2013-2016	2023-2026		4
Non-interest Special Benefit Treasury Bond X, 2 Series	2013-2016	2023-2026		19
Non-interest Special Benefit Treasury Bond XIII, 1 Series	2021	2026		19
Non-interest Special Benefit Treasury Bond XVII, 3 Series	2012-2016	2022-2026		113
Non-interest Special Benefit Treasury Bond XXII, 6 Series^(a)	2012-2017	2022-2027		564
Non-interest Special Benefit Treasury Bond XXVII, 7 Series^(a)	2013-2021	2023-2031		19,401
Non-interest Special Benefit Treasury Bond XXIX, 1 Series	2021	2026		160
Non-interest Treasury Bond for Special Condolence XI, 1 Series	2020	2025		130,801

Total Bonds			¥	1,027,089,728

2. Borrowings
Former Temporary Military Expenditure^(b)	1943-1945		¥	41,422
Allotment of Local Allocation and Local Transfer Tax	2007	2037		8,758,222
Former National Centers for Advanced and Specialized Medical Care	2010	2023-2035		19,832
Special Account for Energy Policy (0.01-1.3 %)	2009-2022	2022-2036		103,298
Special Account for Stable Food Supply (0.01-1.2%)	2010-2022	2023-2035		24,044
Special Account for National Forest Debt Management (0.0-0.06%)	1996-2022	2022-2033		1,143,754
Special Account for Motor Vehicle Safety (0.0-0.4%)	2003-2022	2023-2041		554,939

Total Borrowings			¥	10,645,511

Total Direct Internal Funded Debt			¥	1,037,735,239

(a)

The amounts outstanding for Non-interest Special Benefit Treasury Bond XXII, 6 Series and for Non-interest Special Benefit Treasury Bond XXVII, 7 Series are higher than the amounts outstanding for the other Non-interest Special Benefit Treasury Bond series listed in this table because these bonds relate to “special benefit for the wives of the war dead, etc.”, for which benefit payments are high compared to other special benefits.

(b)	Represents borrowings by the government from special corporations of currencies of areas under Japanese control during World War II. The maturity of such borrowings and other matters relating to such borrowings remain undetermined.

Floating Debt


Title	Interest	Year of Maturity	Principal Amounts Outstanding as of March 31, 2022 (in millions)
1. Bonds
Treasury Discount Bills
Food Financing Bills	Non-interest bearing	2022	¥	179,000
Foreign Exchange Fund Financing Bills	Non-interest bearing	2022		84,859,480
Petroleum Financing Bills	Non-interest bearing	2022		1,160,400
Treasury Bills, 22 Series	Non-interest bearing	2022-2023		69,096,640
Note in Substitution for Currency of the International Monetary Fund	Non-interest bearing	Payable on demand		3,690,438
Note for Contribution to the Special Funds of the Asian Development Bank	Non-interest bearing	Payable on demand		39,942
Note in Substitution for Currency of the African Development Fund	Non-interest bearing	Payable on demand		52,004
Note in Substitution for Currency of the International Fund for Agricultural Development	Non-interest bearing	Payable on demand		4,637
Note in Substitution for Currency of the Global Environment Facility Trust Fund of the International Bank for Reconstruction and Development	Non-interest bearing	Payable on demand		57,463
Note in Substitution for Currency of the Multilateral Investment Guarantee Agency	Non-interest bearing	Payable on demand		721
Note in Substitution for Currency of the Green Climate Fund	Non-interest bearing	Payable on demand		58,876
Government Bonds issued to Development Bank of Japan	Non-interest bearing	Payable on demand		1,324,665
Government Bonds issued to Nuclear Damage Liability Facilitation Fund	Non-interest bearing	Payable on demand		3,264,900

Total Bonds			¥	163,789,163

2. Borrowings
Special Account for Local Allocation Tax	0.000-0.05%	2022	¥	30,112,295
Special Account of Pension	0.05%	2022		1,440,920
Special Account for Energy Policy	0.000%	2022-2023		8,229,822

Total Borrowings			¥	39,783,037
Total Direct Internal Floating Debt			¥	203,572,201

Total Direct Internal Debt			¥	1,241,307,439

Debt Guaranteed by the Japanese Government


Title	Interest		Year of Issue		Year of Maturity		Principal Amounts Outstanding as of March 31, 2022 (in millions)
1. Bonds Issued by Government-Affiliated Corporations
Japan Finance Corporation		0.001-0.911%		2012-2021		2022-2031	¥	735,000
Japan Expressway Holding and Debt Repayment Agency		0.001-2.700%		2006-2022		2022-2061		13,671,500
New Kansai International Airport Co., Ltd.		0.105-2.400%		2007-2019		2022-2029		247,100
Development Bank of Japan		0.001-2.200%		2007-2021		2022-2061		1,315,000
Deposit Insurance Corporation of Japan		0.001-0.100%		2018-2021		2022-2024		1,480,000
Nuclear Damage Compensation and Decommissioning Facilitation Corporation		0.001%		2018-2021		2022-2025		800,000
The Corporation for Revitalizing Earthquake-Affected Business		0.001%		2017		2021		—
Private Finance Initiative Promotion Corporation of Japan		0.001-0.145%		2017-2021		2026-2027		88,000
Fund Corporation for the Overseas Development of Japan’s ICT and Postal Services Inc.		0.110%		2021		2031		10,000
Organization for Promoting Urban Development		0.020-0.699%		2013-2022		2023-2042		95,800
Central Japan International Airport Co., Ltd.		0.001-0.671%		2013-2022		2023-2042		154,500
Japan Finance Organization for Municipalities		0.001-2.200%		2007-2021		2022-2030		4,010,000
Japan Housing Finance Agency		0.001-0.265%		2021-2022		2026-2034		220,000

Total							¥	22,826,900


2. Borrowings of Government-Affiliated Corporations
Incorporated Administrative Agency — Farmers Pension Fund		0%		2019-2022		2022-2024	¥	202,200
Japan Railway Construction, Transport and Technology Agency		0%		2020		2021		—
Japan Oil, Gas and Metals National Corporation		0%		2021-2022		2022-2023		476,363
Banks’ Shareholdings Purchase Corporation		0%		2022		2023		180,000
Deposit Insurance Corporation of Japan		0%		2021-2022		2022-2023		25,500
Japan Investment Corporation		0%		2021		2022		150,000
Nuclear Damage Compensation and Decommissioning Facilitation Corporation		0%		2021		2022		200,000
The Corporation for Revitalizing Earthquake-Affected Business		0%		2021		2022		14,600
Organization for Promoting Urban Development		0%		2021		2025		5,500

Total							¥	1,254,163
Total Internal Debt Guaranteed by the Japanese Government							¥	24,081,063

EXTERNAL DEBT

Debt Guaranteed by the Japanese Government


	Interest		Year of Loan		Year of Maturity		Principal Amounts Outstanding as of March 31, 2022 (in thousands)
Japan Bank for International Cooperation		0.375-3.500%		2013-2022		2022-2031	$	45,300,000
		0.375%		2021		2026	£	250,000
Japan International Cooperation Agency		1.000-3.375%		2016-2021		2026-2031	$	2,580,000
Development Bank of Japan		0.500-3.250%		2014-2021		2022-2031	$	13,150,000
		4.750%		2007		2027	€	700,000
		1.050-2.300%		1998-2006		2022-2028	¥	280,000,000

Totals by currency							$	61,030,000
							£	250,000
							€	700,000
							¥	280,000,000

SUBSCRIPTIONS TO INTERNATIONAL FINANCIAL ORGANIZATIONS

The following table sets forth information relating to Japan’s obligations to contribute to the capital and financing requirements of international financing organizations in which it participates as of March 31, 2022.


Organization	Subscription Amount
	(in USD millions)
International Monetary Fund	$	42,606	^(a)
International Bank for Reconstruction and Development		23,280	^(b)
International Development Association		50,118	^(c)
International Finance Corporation		1,716	^(d)
Multilateral Investment Guarantee Agency		97	^(e)
International Fund for Agricultural Development		600	^(f)
Asian Development Bank		23,186	^(g)
African Development Bank		10,922	^(h)
African Development Fund		4,767	⁽ⁱ⁾
European Bank for Reconstruction and Development		2,889	^(j)
Inter-American Development Bank		8,878	^(k)
Inter-American Investment Corporation		81	^(l)
Multilateral Investment Fund		655	^(m)

(a)	Equivalent of SDR 30,820.5 million as of March 31, 2022.

(b)	As stated in IBRD Financial Statements as of June 30, 2021.

(c)	As stated in IDA Financial Statements as of June 30, 2021.

(d)	As stated in IFC Financial Statements as of June 30, 2021.

(e)	As stated in MIGA Financial Statements as of June 30, 2021.

(f)	As stated in IFAD Financial Statements as of December 31, 2020.

(g)	As stated in ADB Financial Statements as of December 31, 2021.

(h)	As stated in AfDB Financial Statements as of December 31, 2021. Equivalent of UA 7,804 million.

(i)	As stated in AfDF Financial Statements as of December 31, 2021. Equivalent of UA 3,406 million.

(j)	As stated in EBRD Financial Statements as of December 31, 2020. Equivalent of € 2,557 million.

(k)	As stated in IDB Financial Statements as of December 31, 2021.

(l)	As stated in IIC Financial Statements as of December 31, 2021.

(m)	As stated in MIF Financial Statements as of December 31, 2020.

USE OF PROCEEDS

The net proceeds from the sale of the Debt Securities will be allocated to JICA’s Finance and Investment Account dedicated to its ODA Loans and Private Sector Investment Finance activities. An amount equal to part or all of such net proceeds may be allocated for investments in one or more Eligible Projects (as defined below).

“Eligible Projects” means projects selected under the Development Cooperation Charter, which was endorsed by the Japanese government in 2015 with the aim to proactively contribute to peace, stability and prosperity in the international community. JICA selects Eligible Projects through a rigid process that involves evaluation based on OECD-DAC Criteria for Evaluating Development Assistance, review by external experts and approval by the Japanese government. Through each Eligible Project, JICA strives to promote socio-economic development of developing countries and address challenges to Sustainable Development Goals (SDGs) adopted at the UN Sustainable Development Summit.

Eligible Projects will be subject to on-site monitoring by one of JICA’s 98 overseas offices located around the world. During the monitoring stage of any project, JICA may confer with the recipient country government or recipient company where necessary, with a view to ensuring the smooth and efficient implementation of the project. Disbursements are often made over a period of time depending on the project’s schedule. Eligible Projects will be subject to periodic progress reports that must be submitted to JICA by the recipient. JICA supervision of an Eligible Project may extend to both implementation of the project (including construction, engineering, institutional development, etc.) and all aspects of the loan process.

In addition, JICA will, in principle, conduct an ex-post evaluation process within three years of the completion of an Eligible Project. Such evaluations are disclosed on JICA’s website and an Evaluation Report is issued annually.

DESCRIPTION OF THE DEBT SECURITIES AND GUARANTEE

The following is a brief summary of the terms and conditions of the Debt Securities and the fiscal agency agreement or agreements pursuant to which they will be issued (the “Fiscal Agency Agreement”). JICA has filed copies of the forms of Debt Securities and the form of Fiscal Agency Agreement as exhibits to the registration statement of which this prospectus is a part. The following summary does not purport to be complete, and you should refer to such exhibits for more complete information.

General

From time to time, JICA may authorize and issue Debt Securities in one or more series. The prospectus supplement that relates to your Debt Securities will specify the following terms:

•

The designation, aggregate principal amount, currency, any limitation on such principal amount and authorized denominations;

•

The percentage of their principal amount at which such Debt Securities will be issued;

•

The maturity date or dates;

•

The interest rate or rates, if any, which may be fixed or variable, and the dates for payment of interest, if any;

•

The paying agencies where payments of principal, premium, if any, and interest, if any, will be made;

•

Any optional or mandatory redemption terms or repurchase or sinking fund provisions; and

•

Other specific provisions.

If JICA issues any Debt Securities at an original issue discount or payable in a currency other than the United States dollar, the prospectus supplement relating to such Debt Securities will also describe special U.S. federal income tax and other considerations applicable to such Debt Securities.

JICA and Japan will appoint a fiscal agent (the “Fiscal Agent”) or agents in connection with the Debt Securities. The Fiscal Agency Agreement will set forth the Fiscal Agent’s duties. The Fiscal Agent will be a bank or trust company named in the applicable prospectus supplement, but JICA and Japan may replace the Fiscal Agent and may appoint different fiscal agents for different series of Debt Securities. JICA and Japan may maintain deposit accounts and conduct other banking and financial transactions with the Fiscal Agent. The Fiscal Agent is the agent of JICA and Japan, is not a trustee for the holders of Debt Securities and does not have the same responsibilities or duties to act for such holders as would a trustee.

Rank of Debt Securities

The Debt Securities constitute direct, unconditional, unsubordinated and unsecured obligations of JICA and shall at all times rank pari passu and without any preference among themselves. The payment obligations of JICA under the Debt Securities shall, save for such exceptions as may be provided by applicable legislation, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations.

Guarantee of Japan

The payment of principal and interest in respect of the Debt Securities (including any additional amounts) will be unconditionally and irrevocably guaranteed by Japan. Such guarantee will be a direct, unconditional and general obligation of Japan for the performance of which the full faith and credit of Japan will be pledged and rank pari passu with all other general obligations of Japan without any preference one above the other by reason of priority of date of issue, currency of payment or otherwise.

Issuance of the guarantee will be subject to limits imposed by annual budgetary authorizations set by the Japanese Diet. In addition, the issue of the Debt Securities will necessitate the obtaining of authorization by Japan of the guarantee thereof. Accordingly, the guarantee of Japan, the form of which is included as an exhibit to the form of the Fiscal Agency Agreement filed as an exhibit to the registration statement of which this prospectus is a part, is not valid or obligatory until such guarantee has been authenticated.

Additional Amounts

JICA will pay all amounts that it is required to pay on the bonds without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of Japan, or any taxing authority in Japan (“Taxes”), unless the withholding or deduction of such Taxes is required by law. In that event, JICA will pay such additional amounts that are necessary so that the net amounts received by any beneficial owner of the bonds after such withholding or deduction will equal the amounts that would have been receivable in the absence of such withholding or deduction, except that no such additional amounts will be payable under certain circumstances.

Redemption

If the Debt Securities of a series provide for mandatory redemption, or redemption at the election of JICA, such redemption shall be on at least 30 days’ notice. In event of redemption in part, the Fiscal Agent will select the Debt Securities to be redeemed by lot or in any usual manner it approves. The Fiscal Agent will mail notice of such redemption to holders of registered Debt Securities of such series, to their last addresses as they appear on the register of the Debt Securities of such series.

Acceleration of Maturity

With respect to any series of Debt Securities, in case of the following types of default, the principal amount of a Debt Security of such series will become due and payable at the option of the registered holder of such Debt Security upon the registered holder’s written notice to the Fiscal Agent, unless all defaults shall have been cured prior to the receipt of such notice by the Fiscal Agent:

•

Default in any payment, when due, of principal (if due in installments) or premium, if any, or interest on any of the Debt Securities of such series, or, if such series is entitled to a sinking fund, in the deposit, when due, of any sinking fund payment, and continuance of such default for a period of 30 days;

•

Default in the performance by JICA of any other covenant contained in the Debt Securities of such series, and the continuance of such default for a period of 90 days after written notice thereof to JICA from the registered holder of such Debt Security is received by the fiscal agent.

The Fiscal Agency Agreement will not require JICA to furnish to the Fiscal Agent periodic evidence as to the absence of default.

Governing Law

The Fiscal Agency Agreement, the Debt Securities and the guarantee of Japan will all provide that they shall be governed by, and interpreted in accordance with, the laws of the State of New York, except with respect to authorization and execution by JICA and Japan of the Fiscal Agency Agreement and the Debt Securities and the guarantee of Japan, as the case may be, and any other matters required to be governed by the laws of Japan.

Jurisdiction and Enforceability

JICA will effect the irrevocable appointment of the Fiscal Agent as its authorized agent upon which process may be served in any action based upon the Debt securities (i.e., asserting rights set forth in the Debt Securities) which any holder of a Debt Security may institute in any State or Federal court in The City of New York. JICA will accept the jurisdiction of such court in such action. JICA will also waive irrevocably any immunity from jurisdiction (but not execution) to which it might otherwise be entitled in any action based upon the Debt Securities. The Fiscal Agent is not the agent for service for actions brought under the federal securities laws, and JICA’s waiver of immunity does not extend to such actions. Although Japan is subject to suit based upon the guarantee of the Debt Securities before the Tokyo District Court, Japan has not consented to the jurisdiction of any court outside Japan in connection with actions brought against it for any purpose in any way relating to the Debt Securities or its guarantee of the Debt Securities, has not appointed an agent for service of process in connection with any such action and has not agreed to waive any degree of sovereign immunity to which it may be entitled in any such action.

If you bring an action against JICA under federal securities laws or against Japan for any purpose, unless JICA or Japan (as the case may be) waives immunity with respect to such action, you would be able to obtain a United States judgment in such action against JICA or Japan, as the case may be, only if a court were to determine that the United States Foreign Sovereign Immunities Act of 1976, as amended, precludes the granting of sovereign immunity. Even if you could obtain a United States judgment in any such action under that Act, you may not be able to obtain a judgment in Japan based on such a United States judgment. Moreover, you may not be able to execute upon property of JICA or Japan located in the United States to enforce a judgment obtained under that Act except under the limited circumstances specified in that Act.

TAXATION

The information provided in this section entitled “Taxation” is provided for the convenience only of investors, who are advised to consult their own legal, tax, accountancy or other professional advisers in order to ascertain their particular circumstances regarding taxation.

Japanese Taxation

The following description of Japanese taxation (limited to national taxes) applies to interest with respect to the Debt Securities issued by JICA outside Japan and payable outside Japan, as well as to certain aspects of capital gains, inheritance and gift taxes. Prospective investors should note that the following description of Japanese taxation is not exhaustive.

Tax Withholding Rules

Certain recipients of interest on the Debt Securities are subject to the following Japanese tax withholding rules:

If the recipient of interest on any Debt Securities is:

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an individual non-resident of Japan with no permanent establishment within Japan;

•

a non-Japanese corporation with no permanent establishment within Japan; or

•

an individual non-resident of Japan or non-Japanese corporation with a permanent establishment within Japan, but the receipt of interest on the relevant Debt Securities is not attributable to such permanent establishment,

and the recipient is not a person nor entity controlling, or controlled by, JICA, or otherwise having a prescribed special relationship with JICA as described in Article 6, Paragraph (4) of the Act on Special Measures Concerning Taxation of Japan and Cabinet Order No. 43 of 31 March 1957 promulgated thereunder, as amended (the “Cabinet Order”) (a “Specially-Related Party of JICA”), then, no Japanese income or corporate tax is payable with respect to such interest by way of withholding or otherwise, if such recipient complies with certain requirements. Such requirements include:

•

if the relevant Debt Securities are held through a certain participant in an international clearing organization such as Euroclear and Clearstream, Luxembourg and DTC or a certain financial intermediary prescribed by the Act on Special Measures Concerning Taxation of Japan and the Cabinet Order and related governmental ordinances and regulations (collectively, the “Special Measures Act”) (each, a “Participant”), the requirement to provide, at the time of entrusting a Participant with the custody of the relevant Debt Securities, certain information prescribed by the Special Measures Act (the “Interest Recipient Information”) to enable the Participant to establish that the recipient is exempt from the requirement for Japanese tax to be withheld or deducted and to advise the Participant if the recipient ceases to be so exempt; and

•

if the relevant Debt Securities are not held by a Participant, the requirement to submit to the fiscal agent (or a separate paying agent, if one is appointed) a written application for tax exemption (Hikazei tekiyo Shinkokusho) (the “Written Application for Tax Exemption”), together with certain documentary evidence.

The above-described exemption from withholding tax with respect to interest on the Debt Securities will not be applicable to any Debt Securities on which interest is calculated based on the amount of profits or assets of JICA or a Specially-Related Party of JICA or on any of certain other indices relating to JICA or a Specially-Related Party of JICA as described in Article 6 of the Act on Special Measures Concerning Taxation of Japan and the Cabinet Order.

Failure to comply with the requirements described above or payment of interest to a recipient who is an individual non-resident of Japan or a non-Japanese corporation that in either case is a Specially-Related Party of

JICA will result in the withholding by JICA of income tax at the rate of 15.315%, unless any lower rate or exemption is applicable under the relevant tax treaty between Japan and another country. Individual non-residents of Japan or non-Japanese corporations that are entitled to a reduced rate of Japanese withholding tax or exemption from Japanese withholding tax on payment of interest by JICA are required to submit an “Application Form for Income Tax Convention regarding Relief from Japanese Income Tax and Special Income Tax for Reconstruction on Interest” in advance through JICA to the relevant tax authority before payment of interest.

If the recipient of interest on any Debt Securities is:

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a Japanese bank;

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a Japanese insurance company;

•

a Japanese financial instruments firm; or

•

any other Japanese financial institution that falls under one of certain categories prescribed by the Cabinet Order under Article 6, Paragraph (11) of the Act on Special Measures Concerning Taxation of Japan,

and such recipient receives payment of interest not through a certain payment handling agents in Japan (the “Japanese Payment Handling Agents”) and complies with, among others, the requirement to provide the Interest Recipient Information or to submit the Written Application for Tax Exemption, as the case may be, no income tax will be imposed by way of withholding. The recipient will, however, be subject to regular corporate tax with respect to such interest.

If the recipient of interest on any Debt Security is:

•

an individual non-resident of Japan with a permanent establishment within Japan; or

•

a non-Japanese corporation with a permanent establishment within Japan,

and the receipt of interest is attributable to such permanent establishment, then such interest will not be subject to the withholding by JICA of income tax at the rate of 15.315%, provided that the recipient complies with, among others, the requirement to provide the Interest Recipient Information or to submit the Written Application for Tax Exemption, as the case may be, and that the recipient is not a Specially-Related Party of JICA. The amount of such interest will, however, be included in the recipient’s Japanese source income which is subject to Japanese taxation, and will be subject to regular income tax or corporate tax, as the case may be.

If the recipient of interest on any Debt Securities is an individual resident of Japan or a Japanese corporation other than any of the following institutions that complies with the requirement described below:

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Japanese banks;

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Japanese insurance companies;

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Japanese financial instruments firms;

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other Japanese financial institutions that fall under certain categories prescribed by the Cabinet Order under Article 8, Paragraphs (1) and (2) of the Act on Special Measures Concerning Taxation of Japan (together with Japanese banks, insurance companies and financial instruments firms, the “Specified Financial Institutions”); or

•

Japanese public corporations designated by the relevant law (“Public Corporations”),

and such recipient receives payment of interest through certain Japanese Payment Handling Agents, such agents will withhold income tax at the rate of 15.315%. An individual recipient that receives interest through a Japanese

Payment Handling Agent may elect conclusive taxation exempt from tax reporting. In all other cases, the recipient must include the amount of interest in the recipient’s gross income and will be subject to regular income tax or corporate tax, as the case may be.

If the recipient of interest on any Debt Securities is:

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a Public Corporation that keeps such Debt Securities deposited with, and receives the interest on such Debt Securities through, a Japanese Payment Handling Agent with custody of the Debt Securities (the “Japanese Custodian”); or

•

a Specified Financial Institution that keeps such Debt Securities deposited with, and receives the interest on such Debt Securities through, the Japanese Custodian,

and such recipient submits through the Japanese Custodian, to the competent tax authority, the report prescribed by the Special Measures Act, no income tax will be imposed by way of withholding.

Capital Gains, Inheritance and Gift Taxes

Gains derived from the sale outside Japan of Debt Securities by an individual non-resident of Japan or a non-Japanese corporation with no permanent establishment within Japan are generally not subject to Japanese income or corporate tax. An individual, regardless of his or her residency, who has acquired Debt Securities as legatee, heir or donee from an individual may be required to pay Japanese inheritance or gift tax at progressive rates.

U.S. Taxation

This section describes the material U.S. federal income tax consequences of owning certain Debt Securities. It applies to you only if you are a United States holder (as defined below) and you acquire Debt Securities in the applicable offering at the applicable offering price and you hold your Debt Securities as capital assets for tax purposes. This section does not apply to you if you are a member of a class of holders subject to special rules, such as:

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a dealer in securities or currencies,

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a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings,

•

a bank,

•

a life insurance company,

•

a tax-exempt organization,

•

a person that owns Debt Securities that are a hedge or that are hedged against interest rate or currency risks,

•

a person that owns Debt Securities as part of a straddle or conversion transaction for tax purposes,

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a person that purchases or sells Debt Securities as part of a wash sale for tax purposes, or

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a person whose functional currency for tax purposes is not the U.S. dollar.

This section deals only with fixed rate Debt Securities denominated in U.S. dollars, with no more than de minimis original issue discount, that are due to mature 30 years or less from the date on which they are issued. An applicable prospectus supplement will discuss the United States federal income tax consequences of owning any other Debt Securities.

If a partnership holds Debt Securities, the U.S. federal income tax treatment of a partner generally will depend on the status of the partner and the tax treatment of the partnership. A partner in a partnership holding Debt Securities should consult its tax advisor with regard to the U.S. federal income tax treatment of an investment in Debt Securities.

This section is based on the Internal Revenue Code of 1986, as amended the “Code”, its legislative history, existing and proposed regulations under the Code, published rulings and court decisions, all as currently in effect. These authorities are subject to change, possibly on a retroactive basis.

You are a United States holder if you are a beneficial owner of a Debt Security and you are, for federal income tax purposes:

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an individual citizen or resident of the United States,

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a domestic corporation (or other entity treated as a corporation for U.S. federal income tax purposes),

•

an estate whose income is subject to U.S. federal income tax regardless of its source, or

•

a trust if (1) a U.S. court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust, or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

This subsection addresses only U.S. federal income taxation. Please consult your own tax advisor concerning the consequences of owning and disposing of the Debt Securities in your particular circumstances under the Code and the laws of any other taxing jurisdiction.

Payments of Interest

This discussion assumes that the Debt Securities will be issued with no more than de minimis original issue discount for U.S. federal income tax purposes. You will be taxed on interest on your Debt Securities as ordinary income at the time you receive the interest or when it accrues, depending on your method of accounting for tax purposes.

You must include any tax withheld from the interest payment as ordinary income even though you do not in fact receive it, and you must also include as ordinary income any additional amounts paid with respect to withholding tax on the Debt Securities, including withholding tax on payments of such additional amounts. You may be entitled to deduct or credit tax withheld, subject to applicable limits. The rules governing foreign tax credits are complex and you should consult your tax advisor regarding the availability of the foreign tax credit in your situation. Interest paid by JICA on the Debt Securities is income from sources outside the United States subject to the rules regarding the foreign tax credit allowable to a United States holder and, depending on your circumstances, will be either “passive”, “general” or “foreign branch” income for purposes of computing the foreign tax credit.

Purchase, Sale, and Retirement of the Debt Securities

You generally will recognize capital gain or loss on the sale or retirement of your Debt Security equal to the difference between the amount you realize on the sale or retirement, excluding any amounts attributable to accrued but unpaid interest, and your tax basis in your Debt Security. Your tax basis in your Debt Security generally will be its cost. Capital gain of a noncorporate United States holder generally is taxed at preferential rates where the property is held for more than one year. Your ability to deduct capital losses may be limited.

Medicare Tax

A United States holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will be subject to a 3.8% tax on the lesser of (1) the United States holder’s “net investment income” for the relevant taxable year and (2) the excess of the United States holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual’s circumstances). A United States holder’s net investment income generally will include its interest income and its net gains from the disposition of Debt Securities, unless such interest income or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a

United States holder that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the Medicare tax to your income and gains in respect of your investment in the Debt Securities.

Information with Respect to Foreign Financial Assets

Owners of “specified foreign financial assets” with an aggregate value in excess of $50,000 (and in some circumstances, a higher threshold) may be required to file an information report with respect to such assets with their tax returns. “Specified foreign financial assets” include any financial accounts maintained by foreign financial institutions, as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-United States persons, (ii) financial instruments and contracts held for investment that have non-U.S. issuers or counterparties, and (iii) interests in foreign entities. Holders are urged to consult their tax advisors regarding the application of this legislation to their ownership of the Debt Securities.

Backup Withholding and Information Reporting

If you are a noncorporate United States holder, information reporting requirements on Internal Revenue Service Form 1099 generally will apply to:

•

the payment of the proceeds from the sale of a Debt Security effected at a U.S. office of a broker.

Additionally, backup withholding will apply to such payments if you are a noncorporate United States holder that:

•

fails to provide an accurate taxpayer identification number,

•

is notified by the Internal Revenue Service that it has failed to report all interest and dividends required to be shown on its federal income tax returns, or

•

in certain circumstances, fails to comply with applicable certification requirements.

If you are a U.S. alien holder, you generally are exempt from backup withholding and information reporting requirements with respect to:

•

payments of principal and interest made to you outside the United States by JICA or another non-U.S. payor and

•

other payments of principal and interest and the payment of the proceeds from the sale of a Debt Security effected at a U.S. office of a broker, as long as the income associated with such payments is otherwise exempt from U.S. federal income tax, and:

•

the payor or broker does not have actual knowledge or reason to know that you are a United States person and you have furnished to the payor or broker:

•

an Internal Revenue Service Form W-8BEN or an acceptable substitute form upon which you certify, under penalties of perjury, that you are a non-United States person, or

•

other documentation upon which it may rely to treat the payments as made to a non-United States person in accordance with U.S. Treasury regulations, or

•

you otherwise establish an exemption.

Payment of the proceeds from the sale of a Debt Security effected at a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, unless the broker does not have actual knowledge or reason to know that you are a United States person and the documentation requirements described above are met or you otherwise establish an exemption, a sale of a Debt Security that is effected at a foreign office of a broker will be subject to information reporting and backup withholding if:

•

the proceeds are transferred to an account maintained by you in the United States,

•

the payment of proceeds or the confirmation of the sale is mailed to you at a U.S. address, or

•

the sale has some other specified connection with the United States as provided in U.S. Treasury regulations.

In addition, unless the broker does not have actual knowledge or reason to know that you are a United States person and the documentation requirements described above are met or you otherwise establish an exemption, a sale of a Debt Security effected at a foreign office of a broker will be subject to information reporting if the broker is:

•

a United States person,

•

a controlled foreign corporation for U.S. tax purposes,

•

a foreign person 50% or more of whose gross income is effectively connected with the conduct of a U.S. trade or business for a specified three-year period, or

•

a foreign partnership, if at any time during its tax year: (1) one or more of its partners are “United States persons”, as defined in U.S. Treasury regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership, or (2) such foreign partnership is engaged in the conduct of a U.S. trade or business.

Backup withholding will apply if the sale is subject to information reporting and the broker has actual knowledge that you are a United States person.

Backup withholding is not an additional tax. You generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed your income tax liability by filing a refund claim with the Internal Revenue Service.

PLAN OF DISTRIBUTION

JICA may sell Debt Securities directly, to or through underwriters or through agents. Each prospectus supplement with respect to Debt Securities will set forth the terms of the offering of such Debt Securities, including the name or names of the underwriters or agents, the public offering price of such Debt Securities and the net proceeds to JICA from such sale, any underwriting discounts or other items constituting underwriters’ or agents’ compensation, any discounts or concessions allowed or reallowed or paid to dealers and any securities exchanges on which such Debt Securities may be listed.

If underwriters are used in the sale, they will acquire Debt Securities for their own account and may resell them from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The offer of Debt Securities to the public may take the form of an offer through underwriting syndicates represented by managing underwriters, or a direct offer by one or more investment banking firms or others, as designated. Unless the applicable prospectus supplement otherwise indicates, the obligations of the underwriters to purchase Debt Securities will be subject to certain conditions precedent and the underwriters will be obligated to purchase all Debt Securities offered thereby if any are purchased. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.

JICA may, directly or through agents that it designates, sell Debt Securities from time to time. The applicable prospectus supplement will name any agent involved in the offer or sale of Debt Securities and set forth any commissions payable by JICA to such agent. Unless such prospectus supplement otherwise indicates, any such agent will be acting on a best efforts basis for the period of its appointment.

If the applicable prospectus supplement so indicates, JICA will authorize agents, underwriters or dealers to solicit offers by certain specified institutions to purchase Debt Securities from JICA at the public offering price set forth in such prospectus supplement pursuant to “delayed delivery” contracts. Purchasers of Debt Securities under delayed delivery contracts will pay the public offering price plus accrued interest, if any, and will take delivery of the Debt Securities on a date or dates stated in the applicable prospectus supplement. Such contracts will be subject only to those conditions set forth in such prospectus supplement and such prospectus supplement will set forth the commission payable for solicitation of such contracts.

The applicable prospectus supplement will describe limitations on sales to certain persons of Debt Securities (including limitations imposed by relevant Japanese laws), if any.

AUTHORIZED AGENTS IN THE UNITED STATES

The authorized agent in the United States for JICA, for purposes of the United States Securities Act of 1933, as amended, is TANAKA Satoko, whose address is: JICA USA Office, 1776 I Street, N.W., Suite 895, Washington, D.C. 20006. The authorized agents for Japan are MINOWA Tetsuharu, located at Ministry of Finance, Consulate General of Japan in New York, 299 Park Avenue, 18th Floor, New York, NY 10171 and ODAWARA Takuya, located at Embassy of Japan, 2520 Massachusetts Avenue, N.W., Washington, D.C. 20008.

VALIDITY OF THE DEBT SECURITIES

Anderson Mori & Tomotsune will pass upon the validity of each series of Debt Securities and the guarantee of such Debt Securities, and all other matters of Japanese law and procedure on behalf of JICA and Japan. Morrison & Foerster LLP will pass upon the validity of each series of Debt Securities and the guarantee of such Debt Securities. In giving their opinions, Morrison & Foerster LLP may rely as to all matters of Japanese law and procedure on the opinion of Anderson Mori & Tomotsune, and Anderson Mori & Tomotsune may rely as to matters of New York law upon the opinion of Morrison & Foerster LLP.

EXPERTS

The financial statements of the general account and the finance and investment account of JICA as of and for the fiscal year ended March 31, 2022 included in JICA’s annual report on Form 18-K for the fiscal year ended March 31, 2022, filed September 27, 2022, and as of and for the fiscal year ended March 31, 2021 included in Exhibit 2 to JICA’s annual report on Form 18-K for the fiscal year ended March 31, 2021, filed on September 27, 2021, have been audited by Ernst & Young ShinNihon LLC, independent auditors, as stated in their reports appearing in JICA’s annual report on Form 18-K for the fiscal year ended March 31, 2022 and Exhibit 2 to JICA’s annual report on Form 18-K for the fiscal year ended March 31, 2021, and which are incorporated by reference in this prospectus and elsewhere in the registration statement. Such financial statements are incorporated by reference in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.

FURTHER INFORMATION

The registration statement of which this prospectus is a part, any post-effective amendment to such registration statement, and the prospectus supplement or supplements relating to any series or issue of the Debt Securities, which are on file with the Commission, contain further information concerning such series or issue.

The President of JICA, in his official capacity as such President, thereunto duly authorized, has supplied the information set forth in this Prospectus under the caption “Japan International Cooperation Agency”, and such information is stated on his authority.

The Minister of Finance of Japan, in his official capacity as such Minister, thereunto duly authorized, has supplied the information set forth in this Prospectus under the caption “Japan”, and such information is stated on his authority.

HEAD OFFICE OF THE ISSUER

JAPAN INTERNATIONAL COOPERATION AGENCY

Nibancho Center Building

5-25, Niban-cho, Chiyoda-ku

Tokyo 102-8012

Japan

FISCAL AGENT, PRINCIPAL PAYING AGENT AND TRANSFER AGENT

MUFG Bank, Ltd., London Branch

Ropemaker Place

25 Ropemaker Street

London EC2Y 9AN

also acting through

U.S. Bank Trust Company, National Association

100 Wall St STE 600,

New York, NY 10005

LEGAL ADVISERS

To JICA and Japan

Anderson Mori & Tomotsune

Otemachi Park Building

1-1, Otemachi 1-chome

Chiyoda-ku, Tokyo 100-8136

Japan

To the Underwriters

Morrison & Foerster LLP

Shin-Marunouchi Building, 29th Floor

1-5-1, Marunouchi

Chiyoda-ku, Tokyo 100-6529

Japan

INDEPENDENT AUDITOR

Ernst & Young ShinNihon LLC

Hibiya Mitsui Tower, Tokyo Midtown Hibiya

1-2, Yuraku-cho 1-chome

Chiyoda-ku, Tokyo 100-0006

Japan International Cooperation Agency

U.S.$1,250,000,000 4.000% Guaranteed Bonds Due May 23, 2028

Unconditionally and Irrevocably Guaranteed

as to Payment of Principal and Interest

Japan

PROSPECTUS SUPPLEMENT

Daiwa Capital Markets Europe

Barclays

Citigroup

Morgan Stanley

May 16, 2023

Japan International Cooperation Agency 424B5Prospectus supplement for primary offering