Tuesday, July 10, 2007

Japan Should Diversify $700 Billion of Currency Reserves, Adviser Ito Says

(Bloomberg) -- Japan, the largest overseas holder
of U.S. Treasuries, should invest $700 billion of its currency
reserves in higher-yielding assets such as stocks and corporate
bonds, said Takatoshi Ito, an adviser to the prime minister.

The reserves should be managed by a special fund that will
gradually diversify into euros, Australian dollars and emerging
market currencies, he said in an interview in Tokyo. Ito said
that the Ministry of Finance, which expanded its currency
reserves by selling yen in 2003 and 2004, has essentially
borrowed the funds from the Japanese people.


Read more at Bloomberg Currencies News

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