— Correcting To $1.305 trillion From Y1.305 trillion, To end-October
From end-September in 1st Paragraph
— Japan Nov FX Reserves Record $1.305 Trln Vs Oct $1.210 Trln
— Japan Nov FX Reserves Top Previous High of $1.219 Trln in Aug
— Japan Nov FX Reserves Post 2nd Monthly Rise in Row

TOKYO (MNI) – Japan’s foreign reserves jumped to a fresh record
high of $1.305 trillion at the end of November from $1.210 trillion at
end-October on Tokyo’s massive yen-selling intervention, Ministry of
Finance data showed on Wednesday.

November reserves surpassed the previous record high of $1.219
trillion hit in August. The November rise by $94.9 billion was the
largest on record and the second straight monthly gain.

The recent MOF data showed that Japan spent Y9.01 trillion on
intervening in the FX markets between Oct. 28 and Nov. 28, which raised
speculation that Japan conducted yen-selling operations not only on Oct.
31 but also on other working days during that period.

Japan has confirmed that it intervened in the foreign exchange
market on Oct. 31, when the yen hit a fresh life-time high of Y75.32
versus the dollar.

The MOF said last month that October foreign reserves did not
reflect the forex intervention, which had not been settled by the end of
October.

Japan’s forex reserves remain the second largest in the world after
China’s, which stood at about $3.20 trillion at the end of September.

At the end of last month, Japan’s foreign currency reserves stood
at $1.22 trillion, IMF reserves at $16.59 billion, SDRs at $19.96
billion, gold at $42.96 billion and other reserve assets at $462
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.

This 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 G-7 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$]