Latest News:  


China increases Japanese bond holdings

By Zhao Qian (Global Times)

13:47, May 29, 2013

China maintained its position as Japan's largest creditor by increasing its holdings of Japanese treasury bonds to 20 trillion yen ($196 billion) at the end of 2012, up 14 percent from the previous year, according to data released Tuesday by the Bank of Japan (BOJ).

By contrast, the US reduced its holdings of Japanese treasury bonds last year by 15 percent to 8.6 trillion yen, while the UK, the largest European creditor of Japan, reduced its holdings by 23 percent to 8.87 trillion yen, according to the BOJ data.

"As the total amount of China's foreign reserves has increased quickly, it was reasonable that China increased its holdings (of Japan's treasury bonds) last year amid concerns about the EU debt crisis and the weakening US economy," Zhao Xijun, deputy director of the Finance and Securities Research Institute at Renmin University of China, told the Global Times Tuesday.

"As the largest holder of US treasury bonds, China also needs to diversify its portfolio to balance its foreign exchange reserves investments," Zhao noted.

China's foreign reserves hit $3.31 trillion by the end of 2012, up 4 percent compared with the previous year, according to the People's Bank of China. And the number had risen to $3.44 trillion by the end of the first quarter this year.

Compared with other foreign investment products, "Japanese treasury bonds have always had a relatively stable yield as most of the holders are domestic investors, and the government is unlikely to allow big potential risks," Zhao noted.

The benchmark 10-year yield for Japanese treasury bonds rose to 0.905 percent Tuesday, up 7 basis points from the previous day.

China started to raise its reserves of Japanese treasury bonds substantially in 2011, when its holdings hit a record high of 18 trillion Japanese yen, up 71 percent from the previous year.

Liu Dongliang, a senior analyst at China Merchants Bank, told the Global Times Tuesday that Japanese treasury bonds are still a good investment target due to the lower risk involved, although the recent depreciation of the yen may cause losses for its foreign holders.

Japanese Prime Minister Shinzo Abe has released a series of quantitative easing policies since he took office last December, and has promised to promote further yen depreciation to stimulate the world's third largest economy.

Zhao said the fall in the yen has not only hurt China's interests but also those of other countries like the US, which is unlikely to allow the yen to depreciate continuously in the long term.

China's annual export volume to Japan is much lower than US exports to Japan, Zhao noted.

Depreciation in the yen has greatly affected China's exports to Japan, even if the country's quantitative easing measures have been effective in aiding the recovery of its domestic economy, Ministry of Commerce spokesman Shen Danyang said on May 16.

We Recommend:

Intelligent & beautiful Asian business women

19-year-old self-made multimillionaire

55th Housing Fair held in E China's Jiangsu

Top 10 instant noodles of all time

Eye-catching models highlight house fair

'Lipstick effect' hits China as economy slows

10 million-yuan bra shines in North China

Top 10 most competitive cities in China in 2013

Hot atmosphere at Int'l Brand Underwear Fair

Email|Print|Comments(Editor:ChenLidan、Wang Jinxue)

Leave your comment0 comments

  1. Name


Selections for you

  1. North Sea Fleet conducts training

  2. South Sea Fleet in real-combat drills

  3. Biggest drug seizure accomplished in Panama

  4. Modern movie dream in retro Mingguo street

  5. Fur keeps flying over dogs' rescue

  6. Overgrown waterweeds cleared at Haihe Rive

  7. Hot football teams cheerleaders

  8. Promoting tourism in Beijing

  9. Migrant workers see slower wage rise

  10. Ladies in finance industries

Most Popular


  1. Mutual trust essential for China-U.S. relations
  2. Turning-on-red rule is dangerous for pedestrians
  3. Boy's graffiti signals lack of values at home
  4. Sino-Indian diplomatic miracle embarrasses Japan
  5. U.S. dollar could weaken most Asian currencies
  6. Apple's tax dodge smacks of abuse
  7. Chinese premier's Swiss tour fruitful, influential
  8. China-Switzerland FTA to benefit both sides
  9. What China-Switzerland FTA brings about?

What’s happening in China

Modern movie dream in retro Mingguo street

  1. Man arrested for Kunming-Beijing flight bomb hoax
  2. Beijing to unveil flood warning plan
  3. Wedding banquets go smoke-free
  4. Xinjiang official decries extremism
  5. Quality issues with children's wears, toys