China has significantly increased its purchases of Japanese government bonds over the past several months in a bid to diversify its foreign currency reserves, the Wall Street Journal reported. According to Japanese government data, Beijing bought US$6.17 billion worth of government bonds between January and April. This is double China’s full-year record set in 2005 when it purchased US$2.9 billion worth of Japanese government bonds. China, which held US$2.45 trillion in reserves at end-March, is also believed to have increased its purchase of euros in recent years. China’s forex regulator, the State Administration of Foreign Exchange, said: "As a responsible long-term investor, China maintains a diversification strategy for the investment of its foreign-exchange reserves." China bought US$5 billion worth of US Treasury bills in April and US$17.7 billion in March.
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