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TOKYO - Russian sovereign wealth funds may start investing in Japanese financial products, Finance Minister Aleksey Kudrin told his Japanese counterpart Fukushiro Nukaga on Sunday.
Sovereign wealth funds are large government investment vehicles which have recently emerged as key players in global financial markets, helping to shore up Western banks such as Citigroup and UBS hit by the US mortgage crisis.
They have however been criticised for lack of transparency and accountability.
"The two ministers agreed on expanding the economic and financial relations between Japan and Russia," said a Japanese finance ministry official who attended the bilateral meeting held a day after the Group of Seven finance ministers and central bankers meeting in Tokyo.
"In this context, Minister Kudrin said Russia plans to expand the management portfolio for its sovereign wealth funds," he said.
Russia recently changed the standard of its sovereign wealth funds management and decided to expand their portfolio from triple-A bonds only denominated in dollar, euros or pounds to other financial products, according to the official.
"At Mr. Kudrin's remark, I wondered if he was talking about the Japanese government bonds which are also rated triple-A by credit rating agencies, he said.
Kudrin, together with finance ministers from China, Indonesia, and South Korea, joined on Saturday the so-called "outreach meeting" that the G7 now regularly organises on the sidelines of its gatherings.
The issue of sovereign wealth funds "were talked but not intensely discussed" at the outreach meeting, another finance ministry official told reporters.
A top European finance official has criticised Russia for restricting foreign investment even as it looks to pump its own energy revenues into overseas companies.
"It is unacceptable that while Russia's government-affiliated fund is sweeping into Europe, European companies are in a situation where they are unable to do similar activities in Russia," Luxembourg Finance Minister Jean-Claude Juncker told Japan's Asahi Shimbun newspaper in an interview.
Juncker, who is also prime minister and is chairman of the Eurogroup of finance ministers, participated in the G7 meeting on Saturday.
- AFP /ls
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