Latest news with #JBIC
CNA
31-07-2025
- Business
- CNA
Japan's FX reserve account reaps record surplus in FY2024
TOKYO :Japan logged a record surplus of $36 billion from a special government account for foreign exchange reserves in the last fiscal year through March, thanks to solid returns on foreign assets which were amplified by a weaker yen. The surplus from the special account, which manages foreign exchange reserves for currency market interventions, totalled 5.4 trillion yen ($36.18 billion), up 38 per cent from the previous year, the Finance Ministry said on Thursday. The robust returns reflected a wide gap in interest rates on cheap yen-denominated debt and high-yielding foreign securities holdings, most of which are believed to be U.S. Treasuries bought during bouts of dollar-buying intervention when the yen was strong. The yen's depreciation also boosted the value of foreign reserves in yen terms. The government is allocating 3.2 trillion of the surplus to the general budget account for the current fiscal year - a third of which would be spent on defence. The special account is used to partially fund state-owned Japan Bank for International Cooperation (JBIC), which will provide loans and equity for Japan's $550 billion investment package agreed in the U.S. tariff deal. ($1 = 149.2700 yen)
Reuters
31-07-2025
- Business
- Reuters
Japan's FX reserve account reaps record surplus in FY2024
TOKYO, July 31 (Reuters) - Japan logged a record surplus of $36 billion from a special government account for foreign exchange reserves in the last fiscal year through March, thanks to solid returns on foreign assets which were amplified by a weaker yen. The surplus from the special account, which manages foreign exchange reserves for currency market interventions, totalled 5.4 trillion yen ($36.18 billion), up 38% from the previous year, the Finance Ministry said on Thursday. The robust returns reflected a wide gap in interest rates on cheap yen-denominated debt and high-yielding foreign securities holdings, most of which are believed to be U.S. Treasuries bought during bouts of dollar-buying intervention when the yen was strong. The yen's depreciation also boosted the value of foreign reserves in yen terms. The government is allocating 3.2 trillion of the surplus to the general budget account for the current fiscal year - a third of which would be spent on defence. The special account is used to partially fund state-owned Japan Bank for International Cooperation (JBIC), which will provide loans and equity for Japan's $550 billion investment package agreed in the U.S. tariff deal. ($1 = 149.2700 yen)
Wall Street Journal
28-07-2025
- Business
- Wall Street Journal
U.S. Promised Windfalls From Japan Deal. Tokyo Has Other Ideas.
TOKYO—Japan is playing down the risks from its trade deal with President Trump after the White House said the U.S. would direct $550 billion in investments by Japan and keep 90% of the profit. Tokyo's chief negotiator, Ryosei Akazawa, said Monday that the government bank at the center of the investment deal would strictly review the projects it is asked to finance and approve only those that comply with Japanese law. Critics of the deal have suggested Tokyo would have to follow Trump's orders on what to fund, potentially threatening the finances of the Japan Bank for International Cooperation, or JBIC.
Khaleej Times
27-07-2025
- Business
- Khaleej Times
Japan says $550 billion package in trade deal could finance Taiwanese chipmaker in US
Japan's $550 billion investment package agreed in this week's U.S. tariff deal could help finance a Taiwanese firm building semiconductor plants in the U.S., Japan's top trade negotiator Ryosei Akazawa said on Saturday. Japan agreed to the sweeping U.S.-bound investment initiative, which includes equity, loans and guarantees, in exchange for lower tariffs on its exports to the U.S. However, the structure of the scheme remains unclear. "Japan, the United States, and like-minded countries are working together to build supply chains in sectors critical to economic security," Akazawa told public broadcaster NHK. To that end, he said projects eligible for financing under the package are not limited to U.S. or Japanese firms. "For example, if a Taiwanese chipmaker builds a plant in the U.S. and uses Japanese components or tailors its products to meet Japanese needs, that's fine too," he said, without specifying companies. The U.S. is significantly reliant on Taiwan's TSMC for advanced chip manufacturing, raising economic security concerns due to geographic proximity to China. TSMC announced plans for a $100 billion U.S. investment with U.S. President Donald Trump at the White House in March, on top of $65 billion pledged for three plants in the state of Arizona, one of which is up and running. Japan will use state-owned Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI) for the investments. A recent law revision has enabled JBIC to finance foreign companies deemed critical to Japan's supply chains. Akazawa told NHK that equity investment would account for just about 1-2% of the $550 billion, suggesting that the bulk will come in the form of loans and guarantees. When asked about the White House statement that the U.S. would retain 90% of the profits from the package, he clarified that the figure refers only to returns on equity investment, which would represent a small fraction of the total. While Japan initially hoped to secure half of the returns, a loss from the concession on the profit-sharing would be marginal compared to the roughly 10 trillion yen ($67.72 billion) in tariff costs that could be avoided under the deal, he said. He added that Japan aims to deploy the $550 billion investments during Trump's current term.
Gulf Today
27-07-2025
- Business
- Gulf Today
US reaches deal with Japan, tariff cut
The United States, riding a tariff wave launched by President Donald Trump, has concluded a trade agreement with Japan, the fourth largest economy in the world, in Washington on Tuesday. According to the agreement, the US will impose 15 per cent tariff on all goods imported from Japan. This is a much lower rate than the 25 per cent that Trump had threatened Japan with from August 1. Even as the deadline hovered over the talks, the two sides managed to arrive at an agreement much before the dreaded date. Trump had declared on his Truth Social, his personal portal, 'This Deal will create Hundreds and Thousands of Jobs – There has never been anything like it. This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan.' Japanese Prime Minister Shigeru Ishiba said, 'Since February, we have been negotiating with our national interests at stake. Both sides have engaged in all-out, close-to-the-edge negotiations over automobiles and other products. I believe this outcome reflects those efforts.' The trade agreement reflects interesting details. Though it appears that the United States has gained hugely going by the headline figures – Japan will have to invest $550 billion in the United States, open its agricultural sector to American rice – the impact on the Japanese GDP would be a mere 0.55 per cent. Even if the tariff rate had remained at the apparently punitive 25 per cent, the impact on Japanese GDP would have been 0.85 per cent. The US was running a trade deficit of $69.4 billion. And Japan will channel the investments in the US from state-backed institutions like Japan Bank for International Cooperation (JBIC) or through guaranteed loans. The Japanese investments are to be made in semi-conductors, pharmaceuticals, steel, shipbuilding, critical minerals, aviation, energy, automobiles, AI and quantum technology. The sensitive area for Japan is the import of rice. Japan consumes seven million tonnes of rice every year. It maintains a tariff-free quota of 770,000 tonnes. And it will increase the ratio of US rice imports within this range. It is said that there is room for rice imports outside the free tariff quota, with the proviso of 341 yen ($.2.33) per kilogramme of rice. Prime Minister Ishiba referring to the opening of rice imports from the US, said, 'You can think of it as increasing the proportion of rice procured from the United States, under the minimum access arrangement, but this agreement does not include any provisions that would sacrifice agriculture.' Both sides have bargained hard, and each side has claimed victory. The Japanese believe that that they have succeeded in bringing down the reciprocal tariff rate from 25 per cent to 15 per cent, a clear 10 per cent reduction. The US believes that it has managed to force Japan to necessarily invest in the US – according to the deal $550 billion – and that 90 per cent of the profits made from the investments will remain in the United States, and that it has succeeded in prising open the protected agricultural market, especially with regard to rice. It is expected that the US-Japan trade deal will serve as a template for the trade agreements with the European Union (EU) and China. The expectation is that the US will settle for a 15 per cent tariff with these two as well. The US is willing to be reasonably generous with big trade partners like Japan, EU, and China. But with smaller countries and economies like the Philippines and Indonesia it is playing tough. In the deal with the Philippines and Indonesia, the US has brought down the tariff regime from 20 per cent to 19 per cent. The trade balance of the US with these two countries is much lower, $17.9 billion with Indonesia and $4.9 billion with the Philippines.
