Japan Studies Optimization of $1.3 Trillion Foreign Exchange Reserves to Boost Returns

According to Reuters, on June 24, Japan is studying how to optimize the management of approximately $1.3 trillion in foreign exchange reserves to boost investment returns. A growth strategy draft reviewed this week showed the government plans to evaluate public asset management methods, including a special foreign exchange account, while maintaining the core function of reserves for currency intervention.

The move follows Japan's $73 billion intervention in late April that resulted in a record 5.6% monthly decline in forex reserves in May. Despite the intervention, the U.S. dollar rebounded to 161.70 against the yen on Wednesday, approaching its 1986 high of 161.96.