The Japanese government will leave itself as much room for foreign exchange intervention in the fiscal year starting next April as it did this year, according to a draft of next year's budget.
Under the government's draft plan, approved by the cabinet on Saturday, Tokyo will keep its borrowing ceiling for its foreign exchange special account unchanged at 140 trillion yen ($1.2 trillion) from the current fiscal year.
Japanese authorities sold a record 20 trillion yen in 2003 and another 15 trillion yen in the first three months of 2004, fearing the yen's strength would hurt the economy.
But they have stayed out of the market since March 2004 - the longest the government has gone without intervening under current records dating back to 1991.
The budget proposals also showed the special account that holds Japan's foreign currency assets acquired through intervention, called the Foreign Exchange Fund Special Account (FEFSA), will continue transferring surplus funds to the general account.
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