Japan
Briefs
by
Scott B. MacDonald
Japan’s Foreign Exchange Reserves – A
New Record: Japan's foreign reserves
breached the $700 billion mark for the first
time, rising $67.71 billion to a record $741.24
billion at the end of January, according to
data released Friday by the Ministry of Finance.
It was the fifth straight record high and the
biggest monthly gain ever. The key reason for
the massive rise in foreign exchange reserves
was the government’s carrying out a series
of dollar-buying interventions, worth a total
of Y7 trillion, on foreign exchange markets
in the month.
New Tighter Accounting Standards for
Regional Banks: It was announced in
early March that the four major auditing firms
plan to apply stricter guidelines for regional
banks, focusing on the credibility of deferred
tax asset valuations and urging them to raise
in-house asset assessment standards to a level
on a par with those applied to major banks.
Details of the guidelines have been disclosed.
Shin Nihon & Co., Azsa & Co., ChuoAoyama
Audit Corp. and Tohmatsu & Co. have commenced
to explain the new procedures to regional bank
clients that have begun assessing their assets
in preparation for the fiscal 2003 earnings
results. The key point of the stricter standards
is to improve the reliability of deferred tax
asset estimates, which represent future tax
breaks on loan loss reserves that cannot be
claimed as expenses for current tax purposes.
Most regional banks include such assets in
their equity capital based on profit projections
for the following five years.
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