Prime Minister Shinzo Abe’s government wants to lift the current ban on private involvement, enlisting the services of financial institutions. The country holds around $1.27 trillion (£795.8bn) in foreign exchange reserves, second only to the enormous holdings of the Chinese government, and almost 50 per cent more than the Eurozone.
Currently, the finance ministry and Bank of Japan are charged with managing the reserves. The country is used to political discussion over the management of the reserves, with some arguing for a sovereign wealth fund.
Even if the move is approved by Japan’s legislators, the government is likely to keep a large proportion under central management.
In January, it was announced that Abe’s government would use some the country’s foreign exchange reserves to buy government bonds from the Eurozone, which was widely seen as part of a strategy to devalue Japan’s yen.
Japanese finance minister Taro Aso also commented on the US federal governments shutdown over the weekend, insisting that a resolution to the crisis was important to Japan, as the second-largest international holder of US treasuries after China.