Japan ruling party to study sovereign wealth fund: official
TOKYO (AFP) — Japan's ruling Liberal Democratic Party will set up a task force this week to study the creation of a sovereign wealth fund for Asia's largest economy, a party official said Tuesday.
The team will be headed by former financial services minister Yuji Yamamoto, the official said, declining to be named.
"We are going to set up the project team on Friday to discuss a sovereign wealth fund," the official said.
The task force is to look into the possible creation of a state-run investment fund to tap the nation's foreign exchange reserves, which hit 996.04 billion dollars last month and are the world's second-largest behind China's.
So far the Japanese government has shown caution over calls from some ruling party lawmakers for a state-affiliated investment fund.
On Monday, Yamamoto held a meeting with Prime Minister Yasuo Fukuda, who heads the ruling party, and briefed him on the plan.
Fukuda later told reporters he had asked Yamamoto to proceed "cautiously" on the issue, studying both the potential benefits and risks.
Sovereign wealth funds have come into the limelight after oil-exporting countries and Asian exporters injected cash from their state-run investment funds into ailing US financial institutions hit by the mortgage crisis.
Their rise has led to concerns in some recipient countries about a lack of transparency.
China formally set up its own fund, China Investment Corp., in September to manage 200 billion dollars -- roughly one seventh of the country's forex reserves.
