TOKYO (MNI) – Japan’s foreign reserves fell to $1.096 trillion at
the end of December from $1.101 trillion at end-November, posting the
second straight month-on-month drop, Ministry of Finance data released
Tuesday showed.
The Japanese government conducted no foreign exchange intervention
in December for the third straight month.
Japan’s foreign reserves hit a record high of $1.118 trillion in
October 2010.
In September, the reserves were pushed up by the large-scale forex
intervention to sell yen for the U.S. currency that Japan conducted for
the first time in over six years in a bid to prevent the yen’s rapid
rise from hurting exporter profits and thus a sustained economic
recovery.
The country’s forex reserves remain the second largest in the
world, next to China’s which are estimated at $2.65 trillion at the end
of September.
Foreign exchange reserves consist of securities and deposits
denominated in foreign currencies, International Monetary Fund reserves,
IMF special drawing rights (SDRs) and gold.
At the end of last month, Japan’s foreign currency reserves stood
at $1.036 trillion, IMF reserves at $4.61 billion, SDRs at $20.63
billion, gold at $34.70 billion and other reserve assets at $439
million.
Japan’s forex reserves are closely watched for evidence of how the
country is managing its vast foreign currency holdings.
The biggest changes in Japan’s forex reserves usually occur when
the Bank of Japan intervenes in the currency market on behalf of the MOF
to prevent a steep appreciation or depreciation of the yen.
Before the large-scale intervention to sell a total of Y2.125
trillion for the U.S. dollar on Sept. 15, 2010, Japan had stayed out of
the forex market since mid-March 2004, when it ended its massive
15-month-long yen-selling operation.
tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **
[TOPICS: M$J$$$,M$A$$$,MAJDS$]
