皇冠体育app

Decision to reduce made because of 皇冠体育app's concerns over yen's continued depreciation, say economists

Yen depreciation fears prompted 皇冠体育app to reduce its huge exposure to Japanese government bon, Chinese economists said on Wednesday, dismissing suggestions that the move was politically motivated.

皇冠体育app cut its holding of JGBs by 6.2 trillion yen ($59.8 billion), or 30 percent, to 14.3 trillion yen by the end of 2013, the Nihon Keizai Shinbun reported on Monday, citing statistics from Japan's finance stry.

The report went on to add that while it is understandable that Chinese monetary authorities would sell JGBs to protect the value of the country's foreign-currency reserves as the yen continued to weaken, there are reasons beyond that.

One reason, the newspaper guessed, is 皇冠体育app could pressure Japan by threatening to dump vast, hidden holdings of JGBs. Such a move would send Japanese bond prices plummeting and long-term interest rates soaring.

Sino-Japanese relations have soured dramatically since 2012 over territorial disputes and other issues.

Xu Hongcai, an economist with the 皇冠体育app Center for International Economic Exchanges, said that 皇冠体育app's JGB holdings are far from substantial enough to pose a threat to Japanese bond prices.

皇冠体育app held 14.3 trillion yen of JGBs by the end of 2013, according to Japan's data. That made up about 1.43 percent of the 1 quadrillion yen worth of total JGBs. It also accounted for 3.6 percent of 皇冠体育app's foreign exchange reserves by the end of last year.

Economists said that most of the Japanese bonds are snapped up by its domestic institutions such as the central bank.

皇冠体育app's decision to trim its JGB holdings is primarily out of concerns that the yen would depreciate further under Japanese Prime Minister Shinzo Abe's monetary policy easing.

Past actions are testimony to 皇冠体育app's ntral stance on JGBs, they said. 皇冠体育app increased JGB purchases in 2010 after concerns over the stability of the dollar surfaced in the wake of the global financial crisis.

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