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Business
Noda: Concern on Chinese Bond Purchases
Thursday, September 9, 2010
Yoshihiko Noda
Tokyo -- Right in the midst of a very delicate diplomatic crisis between Tokyo and Beijing over a festering territorial dispute, Finance Minister Yoshihiko Noda decided that now is the best time to question Chinese motives in purchasing Japanese government bonds.
"I don't know what their true objectives are, but we would like to clarify their objectives," Noda said.
He was referring to the fact that China has purchased more than US$27 billion in JGBs since the beginning of this year, according to a MOF study.
Noda added, "There is something unnatural in the fact that China can buy Japanese government bonds while Japan cannot buy theirs."
The finance minister's comments were made in the context of a House of Councillors committee meeting on financial and monetary affairs.
Talk is now emerging that Chinese purchases of JGBs is one of the causes for the soaring value of the yen, although in fact there are many other governments and private sources doing the same.
The yen this week hit a fresh fifteen-year high against the US dollar.
In spite of China's recent surge in purchases of JGBs, the nation's currency reserves are overwhelmingly held in US dollars. According to a recent report, about 65% of China's reserves are held in dollars compared to 3% in yen.
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