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Japan's forex reserves up for second straight month

TOKYO, June 6 (KUNA) -- Japan's foreign exchange reserves grew for the second straight month to USD 1.284 trillion at the end of May, up USD 1.10 billion from the previous month, the Finance Ministry said Friday.
The foreign reserves remained the world's second-largest after China's. The increase was attributed to a rise in interest income from Japanese government-held bonds, the ministry said.
Valuation gains in the government's holdings of US Treasuries, which were affected by lower long-term interest rates in the US, also helped inflate Japan's reserves.
Japan's foreign exchange reserves consist of securities and deposits denominated in foreign currencies plus the International Monetary Fund (IMF) reserve positions, IMF special drawing rights and gold.
As of May 31, foreign currency reserves stood at USD 1.219 trillion, IMF reserves at USD 13.28 billion, IMF special drawing rights at USD 20.10 billion and gold at USD 30.77 billion.
Japan's reserves are closely monitored for evidence of how authorities are managing vast foreign currency holdings, as the actions have significant impact on currency exchange rates and global bond markets, particularly in the US government bond market.
The authorities did not intervene in currency markets to stem the yen's rise after spending JPY 9.09 trillion (USD 88.8 billion) in the final quarter of 2011.
Japan is the only country with foreign reserves of more than USD 1 trillion besides China, whose holdings hit a record of USD 3.95 trillion at the end of March, according to the latest comparable data. (end) mk.ibi