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Japan's forex reserves fall for 1st time in 11 months in April
TOKYO (Thomson Financial) - Japan's foreign exchange reserves dropped for the first time in 11 months in April due to a weaker euro and U.S. Treasury bond prices, the Ministry of Finance said on Friday. The foreign reserves dipped to $1.00 trillion at the end of last month from a record $1.02 trillion in March, the ministry said. At that level, Japan's foreign reserves remained the second largest in the world next to China, whose holdings reached $1.68 trillion at the end of March, according to the latest available figures from the Chinese government. The single European currency fell to $1.5622 at the end of last month from $1.5788 in March, deflating the dollar value of euro-denominated assets, the ministry said. Also, the yield on the 10-year U.S. Treasury bond rose to 3.732 percent from 3.413 percent, pushing down the overall value of Japan's Treasury holdings. Bond prices move opposite to yields. Foreign exchange reserves consist of securities and deposits denominated in foreign currencies, plus International Monetary Fund (IMF) reserves, IMF special drawing rights (SDRs) and gold. At the end of April, Japan had foreign currency reserves of $977.51 billion, IMF reserves of $1.38 billion , SDRs of $3.14 billion , gold reserves of $21.43 billion and other foreign currency assets worth $375 million. Japan's reserves are closely watched for evidence of how the country is managing its foreign currency holdings. They are seen as having a significant impact on exchange rates and bond markets around the world, particularly the U.S. government bond market. The biggest changes in Japan's foreign reserves usually occur when authorities intervene in the currency market to prevent the yen from appreciating rapidly. Monetary authorities have not intervened since mid-March 2004. ($1 = 103.83 yen) [email][email protected][/email] yas/ms COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.