Japan's FX reserve account reaps record surplus in FY2024

TOKYO (Reuters) -Japan logged a record surplus of $36 billion from a special government account for foreign exchange reserves in the last fiscal year through March, thanks to solid returns on foreign assets which were amplified by a weaker yen.

The surplus from the special account, which manages foreign exchange reserves for currency market interventions, totalled 5.4 trillion yen ($36.18 billion), up 38% from the previous year, the Finance Ministry said on Thursday.

The robust returns reflected a wide gap in interest rates on cheap yen-denominated debt and high-yielding foreign securities holdings, most of which are believed to be U.S. Treasuries bought during bouts of dollar-buying intervention when the yen was strong.

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

The government is allocating 3.2 trillion of the surplus to the general budget account for the current fiscal year - a third of which would be spent on defence.

The special account is used to partially fund state-owned Japan Bank for International Cooperation (JBIC), which will provide loans and equity for Japan's $550 billion investment package agreed in the U.S. tariff deal.

($1 = 149.2700 yen)

(Reporting by Makiko Yamazaki; Editing by Lincoln Feast.)

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