Forex reserves increase to record of $946 billion

Japan's foreign-exchange reserves hit a record $945.60 billion in September, up for the fourth consecutive month due to valuation gains in holdings of U.S. Treasuries driven by a fall in interest rates, the Finance Ministry said Friday.

Japan's foreign reserves, the world's second-largest after China, have grown $13.44 billion from the previous month, topping the previous all-time high of $932.16 billion logged in August.

The yield on the benchmark two-year U.S. Treasury notes fell to 3.992 percent as of the end of September from 4.140 percent a month before, pushing up the value of the U.S government bonds held by Japan, a ministry official said. Lower bond yields mean higher bond prices.

The appreciation of the euro against the dollar also inflated Japan's euro-denominated assets, the official said. The single European currency stood at $1.4267 as of the end of September, up from $1.3630 a month earlier.

According to the ministry, Japan had $797.04 billion in foreign securities as of Sept. 30, up from $785.60 billion a month earlier.