Japan advisers urge tapping foreign exchange account surplus to fund spending

Japan's government advisers have suggested utilizing the surplus in the country's foreign exchange special account to fund spending, as a way to secure funding for tax cuts and other spending plans without increasing the nation's already substantial debt. The proposal was made during a meeting of the Council on Economic and Fiscal Policy, as policymakers discuss options to fund the administration's fiscal plans.

Japan's foreign exchange special account currently holds roughly $1.2 trillion in reserves, which has increased due to the yen's depreciation and interest payments from the foreign assets. The surplus in the account should be actively used as a source of funding, according to the proposal, without breaching guidelines set by the finance ministry.

The administration has emphasized its commitment to responsible fiscal policy, while acknowledging that an extra budget may be necessary in the event of economic shocks.