— Japan Jan FX Reserves Record $1.307 Trln Vs Dec $1.296 Trln
— Japan Jan FX Reserves Post 1st M/M Rise In 2 Months
TOKYO (MNI) – Japan’s foreign reserves surged to a record $1.307
trillion at the end of January, surpassing their previous record of
$1.305 trillion hit in November on higher prices of U.S.Treasury notes,
even though Tokyo refrained from yen-selling intervention last month,
Ministry of Finance data showed on Tuesday.
The increase was also led by higher prices of gold and the euro, a
MOF official said.
Japan’s FX reserves marked the first rise in two months, up from
$1.296 trillion at the end of December.
The MOF said Japan did not intervene in the forex market between
Dec. 29 and Jan. 27 after having spent Y9.09 trillion on selling yen for
the U.S. currency in the final quarter of 2011.
Japan intervened in the foreign exchange market on Oct. 31, when
the yen hit a fresh life-time high of Y75.32 versus the dollar, and
conducted further yen-selling operations from Nov. 1 to Nov. 4.
Japan’s forex reserves remain the second largest in the world after
China’s, which stood at $3.18 trillion at the end of December.
At the end of last month, Japan’s foreign currency reserves stood
at $1.23 trillion, IMF reserves at $17.36 billion, SDRs at $19.95
billion, gold at $42.91 billion and other reserve assets at $472
million.
Japan’s forex reserve data are closely watched for evidence of how
the country is managing its vast foreign currency holdings.
The biggest changes in Japan’s forex reserves usually occur when
the Bank of Japan intervenes in the currency market on behalf of the
Ministry of Finance to prevent a steep appreciation or depreciation of
the yen exchange rate.
Last year Tokyo also conducted currency market intervention in
August and March, with the latter operation forming part of a
coordinated move by the Group of Seven industrialized nations to aid
Japan in the wake of the March 11 earthquake disaster.
That intervention was the first concerted G7 forex action since
September 2000, when the euro came under heavy selling pressure as
capital flowed into the U.S. stock market at the peak of the IT bubble.
In September 2010, the reserves were pushed up by the Japanese
government’s large-scale forex intervention to sell yen for the U.S.
currency — the first government intervention in over six years — in a
bid to prevent the yen’s rapid rise from hurting exporter profits and
thus a sustained economic recovery.
Before the large-scale intervention to sell a total of Y2.125
trillion for the dollar on Sept. 15, 2010, Japan had stayed out of the
forex market since mid-March 2004, when it ended its massive
15-month-long yen-selling operation.
tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4835 **
[TOPICS: M$J$$$,M$A$$$,MAJDS$,M$$FX$]
