Japan's FX reserve account logs $31 billion surplus in FY2025

TOKYO, July 31 (Reuters) - ‌Japan posted ​a ​surplus of $31 billion from a special government account for foreign exchange reserves in the fiscal ‌year that ended in March, the second-highest ⁠on record, thanks to a weaker yen boosting its yen ‌returns on foreign assets.

The surplus ‌from the special account, which manages foreign exchange reserves for currency market interventions, totalled 5.06 trillion ​yen ($31 billion), second only to the 5.36 trillion yen logged in fiscal 2024, the Finance Ministry ⁠said on Friday.

Assets in the account, invested mainly in U.S. Treasuries, are ​funded through yen-denominated financing bills, with interest costs more than offset by income from ​Treasuries thanks to the wide ‌U.S.-Japan interest rate differential.

The yen's depreciation also boosted the value of returns in yen ⁠terms.

Of the total surplus, 3.13 trillion yen was transferred to the general account as revenue for fiscal 2026. The ⁠ministry allocated 1.34 trillion yen to the foreign exchange fund, ​while 585 billion yen was carried over to the special account's fiscal 2026 revenue.

Prime Minister Sanae Takaichi has said foreign ‌reserves were a major beneficiary of the weak yen and were "performing very well." Takaichi ‌has previously discussed using the reserve surplus to ⁠help fund a plan ‌to suspend a ​consumption tax on food.

($1 = 163.5000 yen)

(Reporting by Makiko Yamazaki and Takaya Yamaguchi; Editing by Hugh ‌Lawson)

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