Narrowly defined foreign exchange reserves refer to the foreign exchange part of the international reserve assets held by a government. Its manifestations include deposits held by the government in foreign banks, foreign treasury bonds, short-term and long-term bonds and other assets. Dollar, Euro and Pound are the main reserve currencies.
Broad foreign exchange reserves also include reserve assets such as gold reserves and special drawing rights (SDRs). At the same time, foreign exchange reserves are also an important part of a country's liquidity. It is also an important means for a country to balance its balance of payments, intervene in the foreign exchange market, repay foreign debts and raise its financing …show more content…
Wang Xiu in her article "The Issue of China's Foreign Exchange Reserve from a Comparative Perspective," (2011) introduced the growth of the Japanese foreign exchange reserves and its development history, and pointed out that the reasons for its rapid growth mainly include the forced exchange settlement by the government and the control of the yen as well as the operation and balance of payments surplus. After analyzing the ways and objects of the application of foreign exchange reserves between China and Japan, he came up with the conclusion that although the two countries use similar objects, the effect of Japan was better than that of China. Wang Lihua and Jia Yongxiu (2010) in article "The Inspiration of Japan's Foreign Exchange Reserve Management to China", analyzed the experience of Japan's foreign exchange reserve management from the perspectives of Japan's foreign exchange reserve management institutions, principles, measures and risk management. Xu Conglin (2004) in her article "The Evolution and Impact of Japan's Foreign Exchange Law." detailed the evolution of the Foreign Exchange Law, one of Japan's major economic …show more content…
Foreign exchange reserve cannot be suddenly adjusted, it also argued that Zhang Weiying’s propose in 2009 of allocating foreign exchange reserves to nationals is not