Overview
- Finance Minister Satsuki Katayama said using the foreign-exchange reserve surplus is conceivable, while cautioning about intervention capacity and disclosure sensitivities.
- Japan holds roughly $1.4 trillion in FX reserves, and a record 5.4 trillion yen surplus was logged in the reserves account last fiscal year.
- The government is moving to pass next year’s budget and tax reforms quickly, with detailed design work still needed for the proposed two-year suspension of the 8% food levy.
- Markets have shown strain from the tax-cut agenda and broader fiscal expansion, with bond yields jumping on concerns over funding in a heavily indebted economy.
- Opposition leaders floated creating a sovereign wealth fund using FX reserves and BOJ ETF holdings, as officials and economists warn large Treasury sales could curb intervention firepower and unsettle relations with Washington.