• Kyodo News

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Foreign-exchange reserves fell 0.1 percent in February to $1.091 trillion as higher long-term interest rates eroded the value of the government’s bond holdings, the Finance Ministry said Monday.

Official reserve assets and other foreign currency assets — the second-biggest in the world after China’s — have now dropped for a fourth consecutive month, the first time since the government began recording comparable data in April 2000.

The rise in bond yields, which move inversely to the prices, more than offset any positive effects caused by gains from the government’s investments in foreign assets.

The reserves mainly consist of securities and deposits denominated in foreign currencies, gold, and reserve positions and special drawing rights at the International Monetary Fund.

The latest figures included 1.03 billion euro in bonds Japan purchased under the eurozone bailout fund’s 5 billion euro debut issuance, which was designed to prevent the debt crisis in Europe from spinning out of control.

The auction itself was held in January, but the purchase was settled in the reporting month, the ministry said.

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