Japan overseas reserve down for third month after intervention By Reuters

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© Reuters. FILE PHOTO: An image illustration reveals U.S. 100 greenback banks and Japanese 10,000 yen notes taken in Tokyo August 2, 2011. REUTERS/Yuriko Nakao

By Tetsushi Kajimoto

TOKYO (Reuters) -Japan’s overseas reserves prolonged declines in October, following the earlier month’s document drop, the Ministry of Finance mentioned on Tuesday, reflecting the most important ever quantity of yen-buying, greenback promoting intervention.

The info comes alongside separate figures that confirmed Japan didn’t conduct stealth intervention in September and solely entered the market to purchase yen for {dollars} on Sept. 22, its first foray into the market since 1998.

The forex intervention and rising overseas bond yields greater than offset different components that may help reserves, resembling increased valuations of different overseas belongings and earnings features from overseas bond holdings, officers mentioned.

Japan’s overseas reserves fell for a 3rd straight month to$1.19 trillion on the finish of October, nonetheless the world’s second-largest after China, the ministry mentioned.

Market gamers are scrutinising Japan’s huge pool of overseas belongings and intervention information for clues on how rather more Japan could be prepared to spend in its forays into the forex market, though authorities stay tight-lipped on intervention.

Separate knowledge on intervention, which incorporates month-to-month and each day totals, confirmed that authorities didn’t conduct stealth intervention in September, having spent 2.8 trillion yen that month to help the yen.

Japan spent a document 6.35 trillion yen on intervention final month because the yen hit a 32-year low to the greenback.

The yen has remained beneath strain because the Financial institution of Japan stays dedicated to retaining ultra-low rates of interest, in sharp distinction to aggressive fee hikes by the Federal Reserve.

($1 = 146.8700 yen)

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