Japan's $1.4 trillion FX reserves under scrutiny as Takaichi hunts for revenue sources
Story by Makiko Yamazaki and Takahiko Wada, Reuters, February 9, 2026
TOKYO, Feb 9 (Reuters) - Japan's massive foreign currency reserves, a priority war-chest for future yen interventions, have come under renewed scrutiny as Prime Minister Sanae Takaichi scours for funding to bankroll a controversial plan to suspend a consumption tax after her landslide election win.
The focus on the $1.4 trillion stockpile, far larger than the annual state budget, underscores intense pressure on Tokyo to identify alternative funding sources for an estimated 5 trillion yen ($31.99 billion) annual revenue shortfall, a prospect that has unsettled financial markets.
Following Sunday's decisive election victory, Takaichi pledged to speed up deliberation on suspending the 8% tax on food sales for two years without issuing new debt, saying details would need to be discussed with other parties.
Some government officials, who spoke on condition of anonymity due to the sensitivity of the matter, say Takaichi may look to tap the surplus from the reserves after she noted in her campaign speech that Japan's foreign reserves were a major beneficiary of the weak yen and "performing very well."
Asked about the possibility, Finance Minister Satsuki Katayama said in a television interview that it was conceivable that the large surplus could be put to use.
Japan's $1.4 trillion FX reserves under scrutiny as Takaichi hunts for revenue sources |
