Japan's foreign reserves hit an all-time high in November after the government spent a record sum intervening in currency markets to curb the yen's gains and help the export-led economy. Japan has intervened in foreign exchange markets at least three times this year, battling strength in the yen stemming from the eurozone's debt woes and a stuttering global economy.
Finance Minister Jun Azumi has said repeatedly that Japan will not hesitate to take decisive steps against speculative currency moves to protect exporters from a firmer yen. The government "needs to consider that rises in currency reserves led by intervention mean increases in Japan's borrowing as the nation has to issue financing bills for intervention, and it should also consider unrealised losses," said Tohru Sasaki, head of Japan rates and FX research at J.P. Morgan Chase Bank in Tokyo.
Japan's foreign reserves rose to $1.3 trillion at the end of November compared with $1.21 trillion at the end of October, the Ministry of Fiance said on Wednesday. Among components of the foreign reserves, deposits more than tripled to $45.3 billion by the end of November from the end of October and were the highest since January 2010, while securities increased by 5.7 percent. Japanese authorities spent a record 9.09 trillion yen on currency intervention in the month to November 28, the ministry said last month.
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