Analyzing fund flows between forex interventions, Foreign Exchange Fund Special Account, and general account budget (JGB issuance)
Key points
Amid speculation of forex intervention by government and BoJ, JGB investors focus on implications for general account funding and JGB issuance
Intervention likely to reduce issuance of foreign exchange fund financing bills
Intervention unlikely to generate profits in Foreign Exchange Fund Special Account, and past examples suggest it may not be used to fund supplementary budget