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.

Foreign Exchange Reserves

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.

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.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.