Japan's Ministry of Finance may be prepared in the foreign exchange market is established within the Department of a new department to make Japan's huge foreign exchange reserves to maximize return on investment.

According to foreign media reports, a Japanese Finance Ministry officials said yesterday, the Ministry of Finance is preparing in the foreign exchange market within the Department to establish a new department, the goal is to strive to Japan's huge foreign exchange reserves to achieve maximum return on investment. But the officials said the new department will not invest in foreign exchange reserves scattered high risk stocks or real estate assets.

Japan's foreign exchange reserves total more than 900 billion US dollars, second only to China.

The official said the Finance Ministry will continue to invest in foreign exchange reserves safe, highly mobile assets, in order to intervene in currency markets when necessary to quickly transfer funds.

The official said the Ministry of Finance will be the norm for a more positive investment, for example through the sale of reserve assets increased frequency to enhance returns.

In April this year, Japanese officials had disclosed that Singapore is considering a replica of Temasek, the government established a special investment funds, management of the foreign exchange reserves of Japan. The FSA policy research group is to discuss the idea. Then some experts believe that Japan will follow the footsteps of Singapore, and other countries, to conduct a more active foreign exchange reserves investment.

However, the Japanese Finance Minister said that the luck was left responsible for the financial management of foreign exchange reserves and not to consider the establishment of a more active investment management of Japan's huge foreign exchange reserves. "Reserves that should not risky way to manage the funds." He said in a press conference.

Some market participants fear that if the pursuit of the Japanese foreign reserves diversification may cause fluctuations in the foreign exchange market. But yesterday, another one Japanese official said Japan's foreign exchange reserves management policy absolutely no change. The official said that if the new department in April 2008 national budget for the fiscal year beginning in access to funds, it will begin operations in July. Parliament is expected to be early next year through the National Budget.

Japan's reserves management system by the Ministry of Finance for the Ministry of Finance through stored in the Bank of Japan's foreign exchange reserves assets to the Special Account Management. Of the foreign exchange market has been responsible for the operation of foreign currency reserve assets, but no special department responsible for the management of foreign exchange reserves.

Japan's Ministry of Finance initiative that Japan may want to enhance foreign exchange reserves investment income, but Japan's foreign exchange reserves now more conservative management policy has not changed, the majority of Japan's foreign exchange reserves are invested in United States Treasury bonds and other security assets. If Japan to take radical foreign investment diversification strategy could undermine the currency's stability.

Yesterday, the Qatar investment strategies and private equity departments Kenneth Shen meetings in Dubai, said the group wants to diversify its portfolio, because most of its revenue is dollar-based.
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