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Japan’s foreign reserves rise for fifth straight month to all-time high in October

November 11, 2007
By Ken Worsley


On Wednesday, the Ministry of Finance released its foreign reserve data for October, and the nation’s reserve funds have hit an all-time high for the fourth consecutive month, climbing from $945.60 billion in September to $954.48 billion by the end of October.

Japan remains their world’s second largest holder of foreign reserves, trailing only China. China holds about $1.412 trillion. Russia is at third with $407.83 billion.

On the same day, the Ministry of Finance also announced that in fiscal 2006, its foreign currency assets yielded 6.7%, which was almost four times greater than the yield shown in FY2005.

There are some who say the ministry should be diversifying away from its reliance on US Treasury bonds in order to create higher yields for government coffers, but ministry officials remain steadfastly opposed to such a move in their public comments.

Filed Under Economic Reports, Foreign reserves, Ministry of Finance 

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Comments

3 Responses to “Japan’s foreign reserves rise for fifth straight month to all-time high in October”

  1. David on November 12th, 2007 12:14 pm

    Ken,
    I hope that you can clarify for me one issue I have trouble understanding, related to these figures. These figures talk about “Japan’s” foreign reserves. There are also articles on how much in debt the government of Japan is in. As the 2 appear on face value to contradict each other, there is obviously some point that I am missing.

    If both were related to the government the current position could be determined by subtracting the debt from the reserves, but no-one does this in any of the articles. Is it because of accounting reasons, different departments, government debt / private reserves etc?

  2. Jeremy on November 13th, 2007 8:15 pm

    You’re right. Except the debt is in the trillions. Plus
    the Japanese government pisses a lot of it away supporting the
    Yen when it weakens/strengthens. The gov. also has to pay interest
    on its debt (quite low, under 2%). They then take some of the reserves
    and buy U.S gov’t debt at 4-5% interest. So they actually should
    be making money in the end, however, there are The older men in
    the gov. have expressed gratitude to the U.S for
    being kind after WW2 (they should be). When the younger generation fully
    takes over the country I assume this sentiment will be
    gone and they’ll diversify into other currencies like the Euro. The
    gov. also pisses a lot away by lending it to the banks for basically
    nothing!

    I hope I have confused the hell out of you. Plus I am not Ken

  3. Jeremy on November 18th, 2007 8:57 pm

    Gotta love protectionism. It boosts those foreign reserves.

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