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Japan: Staff Report for the 2016 Article IV Consultation—Informational Annex

Author(s):
International Monetary Fund. Asia and Pacific Dept
Published Date:
August 2016
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Fund Relations

(As of June 30, 2016)

Membership Status: Joined: August 13, 1952; Article VIII

General Resources Account:

SDR MillionPercent Quota
Quota30,820.50100.00
IMF’s Holdings of Currency (Holdings Rate)27,111.4587.97
Reserve Tranche Position3,709.4812.04
Lending to the Fund New Arrangements to Borrow5,090.49

SDR Department:

SDR MillionPercent Allocation
Net cumulative allocation12,284.97100.00
Holdings12,387.16100.83

Outstanding Purchases and Loans: None

Latest Financial Arrangements:

TypeDate of ArrangementExpiration DateAmount Approved (SDR MillionsAmount Drawn (SDR Millions)
Stand-ByMar 11, 1964Mar 10, 1965305.000.00
Stand-ByJan 19, 1962Jan 18, 1963305.000.00

Overdue Obligations and Projected Payments to Fund1

(SDR Million; based on existing use of resources and present holdings of SDRs):

Forthcoming
20162017201820192020
Principal
Charges/Interest0.430.430.430.43
Total0.430.430.430.43

Exchange Arrangement:

Japan maintains a free floating exchange rate regime. Since the 2015 Article IV consultation, Japan has not had foreign exchange intervention. The ministry of finance publishes foreign exchange intervention information on its website. The exchange system is free of restrictions on the making of payments and transfers for current international transactions, with the exceptions of restrictions imposed solely for the preservation of national or international security that have been notified to the Fund pursuant to Executive Board Decision No. 144–(52/51).

Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Framework:

Japan underwent an assessment of its AML/CFT framework against the AML/CFT standard by the Financial Action Task Force (FATF) and the Asia/Pacific Group (APG) in 2008. Significant deficiencies were identified, notably with respect to customer due diligence (CDD) requirements, transparency of legal entities, the criminalization of terrorist financing and the freezing of terrorist assets. Since the 2014 Article IV mission, Japan has made significant progress in its commitment to strengthening its AML/CFT legal framework through the FATF standards, notably by enacting the Amendment Act on Prevention of Transfer of Criminal Proceeds, the Act to Amend the Terrorism Financing Act, and the Terrorist Assets Freezing Act. Japan will continue to be monitored by the FATF on its progress including the issuance of subsidiary legislations to implement the enacted Acts.

Article IV Consultation:

The 2015 Article IV consultation discussions were held during May 8–21, 2015; the Executive Board discussed the Staff Report (IMF Country Report No. 15/197) and concluded the consultation on July 17, 2015. The concluding statement, staff report, staff supplement, selected issues paper, and PIN were all published.

Statistical Issues

Economic and financial data provided to the Fund are considered adequate for surveillance purposes. Japan subscribes to the Special Data Dissemination Standard (SDDS) and meets the SDDS specifications for the coverage, periodicity, and timeliness of data. The Japanese authorities hosted a data module mission for a Report on the Observance of Standards and Codes (data ROSC) in September 12–28, 2005. The Report on Observance of Standards and Codes - Data Module, Response by the Authorities, and Detailed Assessments Using the Data Quality Assessment Framework (DQAF) were published March 17, 2006 and are available at http://www.imf.org/external/pubs/ft/scr/2006/cr06115.pdf.

Japan: Table of Common Indicators Required for Surveillance (as of June 20, 2016)
Date of Latest ObservationDate ReceivedFrequency of Data6Frequency of Reporting6Frequency of Publication6Memo Items:
Data Quality – Methodological soundness7Data Quality – Accuracy and reliability8
Exchange RatesJune 2016June 2016DDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities16/10/20166/14/2016Every 10 daysEvery 10 daysEvery 10 days
Reserve/Base MoneyMay 2016June 2016MMM
Broad MoneyMay 2016June 2016MMMLO, LO, LO, LOO, O, O, O, O
International Investment Position2016Q1June 2016QQQ
Central Bank Balance Sheet6/10/20166/14/2016Every 10 daysEvery 10 daysEvery 10 days
Consolidated Balance Sheet of the Banking SystemApril 2016June 2016MMM
Interest Rates2June 2016June 2016DDD
Consumer Price IndexApril 2016May 2016MMMO, LO, O, OO, O, LO, O, O
Revenue, Expenditure, Balance and Composition of Financing3 – General Government42014January 2016AAAO, LNO, O, OLO, O, O, O, LO
Revenue, Expenditure, Balance and Composition of Financing3 – Central Government2014January 2016AAA
Stocks of Central Government and Central

Government-Guaranteed Debt5
2016Q1May 2016QQQ
External Current Account BalanceApril 2016June 2016MMMO, O, LO, OLO, O, O, O, O
Exports and Imports of Goods and ServicesApril 2016June 2016MMM
GDP/GNP2016Q1June 2016QQQO, O, O, O,LO, LO, O, O, LNO
Gross External Debt2016Q1June 2016QQQ

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds and extra budgetary funds), local governments, and social security funds.

Including currency and maturity composition.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Reflects the assessment provided in the data ROSC or the Substantive Update (published on May 17, 2006, and based on the findings of the mission that took place during September 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 7, except referring to international standards concerning (respectively) source data and its assessment, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds and extra budgetary funds), local governments, and social security funds.

Including currency and maturity composition.

Daily (D); weekly (W); monthly (M); quarterly (Q); annually (A); irregular (I); and not available (NA).

Reflects the assessment provided in the data ROSC or the Substantive Update (published on May 17, 2006, and based on the findings of the mission that took place during September 2005) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O); largely observed (LO); largely not observed (LNO); not observed (NO); and not available (NA).

Same as footnote 7, except referring to international standards concerning (respectively) source data and its assessment, statistical techniques, assessment and validation of intermediate data and statistical outputs, and revision studies.

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.

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