Japans foreign exchange reserves hit record high
Every experienced forex trader knows that Japan currently holds the largest foreign currency reserves in the world. Actually Japan has the highest forex reserves in the world for 69 straight months! In the last nine months Japans reserves have jumped three times, the last jump taking place in August. During August Japans reserves have jumped 8.39 billion dollars to a high record of 844.7 billions total. Last record has been set on December 2004. The Japanese foreign exchange reserves consist of deposits and securities denominated in foreign currencies plus International Monetary Fund (IMF) reserves, IMF special drawing rights and gold.
The current record high was caused to some degree by sharp declines in the US treasury (Mostly caused by hurricane Katrina) and recent month's appreciation in the Euro. It is interesting that this record has been achieved without any intervention in the forex market by the Japanese Ministry of Finance (MoF), as claimed by Japans MoF official. Japans reserves are being closely monitored to try and understand how Japan manages her immense foreign currency holdings as their actions may have strong impact on world economy and exchange rates.
By Jim Kang, Editor. Sep 5th, 2005