Key facts
- Japan's foreign exchange reserve account logged a $31 billion surplus in fiscal year 2025.
- This surplus is the second-highest ever recorded.
- The surplus was driven by a weaker yen boosting yen returns on foreign assets.
- Assets in the account are invested mainly in U.S. Treasuries and funded by yen-denominated financing bills.
- A portion of the surplus will be transferred to the general account as revenue for fiscal 2026.
Japan's special account for foreign exchange reserves recorded a surplus of $31 billion in the fiscal year that ended in March, marking the second-highest surplus on record. The Finance Ministry reported that the surplus, totaling 5.06 trillion yen, was primarily driven by the depreciation of the yen, which boosted the yen-denominated returns on the country's foreign assets, mainly U.S. Treasuries. This income more than offset the interest costs associated with the yen-denominated financing bills used to fund these assets, largely due to the wide interest rate differential between the U.S. and Japan. Of the total surplus, 3.13 trillion yen was transferred to the general account as revenue for fiscal year 2026, with 1.34 trillion yen allocated to the foreign exchange fund and 585 billion yen carried over to fiscal 2026 revenue. Prime Minister Sanae Takaichi noted that foreign reserves have been a significant beneficiary of the weak yen.