P.M. BRIEFING : Fed Says Japan Firms May Continue to Trade in U.S. Treasury Securities

The Federal Reserve Board ruled today that Japanese firms may continue to fully participate in the market for U.S. government securities despite lingering concerns that U.S. companies face discrimination in Japan.

By a 5-1 vote, the board approved a report from its staff that found that Japan had made “much progress” in opening its government debt market to foreign firms.

Consequently, the United States should continue to permit Japanese-owned firms to operate as “primary dealers” in Treasury securities, the central bank ruled.

Although any firm may buy Treasury debt, only 42 are designated by the Federal Reserve Bank of New York as primary dealers, eligible to trade securities with the central bank as part of its regulation of the economy.