Japan to Outsource Management of Some Forex Reserves: Official

Japan plans to let private-sector financial institutions manage part of its $1.27 trillion in foreign exchange reserves, a finance ministry official said today.

The government will introduce a bill to a Diet session beginning this week that would lift a ban on outsourcing the management of the reserves, said the official, who asked not to be named. Japan will continue to buy U.S. Treasuries and other assets that are perceived to be safe, retaining its investment stance, the official said.

Japan’s stockpile doubled in the past decade after series of currency-market interventions to curb a rise in the yen to a postwar record of 75.35 per dollar in October 2011 that undercut earnings of exporters from Toyota Motor Corp. to Sony Corp. Japan is the second largest foreign holder of Treasuries as Washington tries to reach a deal to lift the U.S. debt ceiling and prevent a default that could shake global financial markets.

The Nikkei newspaper reported today the government’s plans to outsource management of part of its reserves.

To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net; Kyoko Shimodoi in Tokyo at kshimodoi@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

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