Japan should debate setting up a fund to manage its foreign-currency reserves, Financial Services Minister Yuji Yamamoto said, a signal the nation may diversify its assets from U.S. Treasuries.
"It's important to examine both the good and bad effects on financial markets, and the extent to which the public sector can get involved," said Yamamoto, who added he was unaware of whether the government is considering setting up such a fund.
The government may submit a bill to the Diet during the 2008 session after debating the creation of the fund at Prime Minister Shinzo Abe's key economic panel, Jiji Press reported Thursday. Japan may want to follow China in establishing such a fund to diversify holdings and enhance investment returns.