Japan PM says to manage forex reserves carefully

TOKYO, Dec 10 (Reuters) - Japanese Prime Minister Yasuo Fukuda on Monday reiterated the government's stance that its foreign reserves need to be carefully managed with the focus on ensuring safety and liquidity.

"They (the reserves) are not something to be managed aggressively, as that could destabilise markets in Japan as well as overseas," Fukuda told a parliamentary committee.

Japan's foreign reserves, the world's second-largest after those of China, rose to a record $970 billion by the end of November, largely because lower U.S. interest rates boosted the value of U.S. bonds held in the reserves, government data showed last week.

Japan has been reluctant to diversify its forex reserves and seek higher returns by actively investing them, unlike many other countries that have recently been putting some of their reserves in stocks and other high-risk, high-return assets. (Reporting by Yuzo Saeki; Editing by Hugh Lawson)