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Japanese banks gobble up half of Fed dollar funding

BOJ holds far more currency swaps than ECB, or Bank of England

Japan's banks have relied heavily on dollar injections provided via the central bank throughout the coronavirus outbreak. (Photo by Tsuyoshi Tamehiro)

TOKYO -- About half of dollar funding provided to global central banks by the U.S. Federal Reserve in response to pandemic-triggered liquidity concerns have gone to Japan, where banks are hungry for the greenback due to their expanding operations abroad.

Outstanding cross-currency swaps stood at $447 billion as of Thursday, according to the Federal Reserve Bank of New York. The Bank of Japan was the biggest taker on the list by far with $222 billion, about 50% more than the second-ranked European Central Bank at $145 billion. The difference was even more pronounced compared with others on the list, like the Bank of England at $23.1 billion.

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