TOKYO, Oct. 7 (Xinhua) -- Japan's official reserve assets rose in September to 1.109 trillion U.S. dollars, up 39.446 billion U.S. dollars from a month earlier, the Ministry of Finance (MOF) said in a report on Thursday.

September's figures mark the fourth successive monthly rise of Japan's forex reserves and set a new all-time high, surpassing the previous record of 1.074 trillion U.S. dollars logged at end- November 2009, said the report.

Analysts said the reserves rose due to large-scale forex intervention to sell yen for the U.S. currency conducted last month by Japan to stem the yen's rapid rise that was pummeling exporter profits, which were being eroded when repatriated and slowing the pace of Japan's economic recovery.

The largest swings in Japan's forex reserves occur when the Bank of Japan intervenes in the currency market on behalf of the MOF to prevent a steep appreciation or depreciation of the yen, as was the case in Sept.

Japan's forex reserves remain the second largest in the world, following China's which are in the region of 2.45 trillion U.S. dollars.

Large reserves of foreign currency allow the Japanese government to manipulate exchange rates -- usually to stabilize the foreign exchange rates to provide a more favorable economic environment, and the greater Japan's foreign reserves, the better position it is in to defend itself from speculative attacks on the yen.

In addition, Japan's forex reserves are important indicators of its ability to repay foreign debt and for its currency defense, and are used to determine Japan's credit rating. Standard & Poor's Ratings Services current has a AA credit rating for Japan.

The credit health of Japan, which has been struggling under a growing mountain of debt, was set to further deteriorate prior to the central bank's recent moves to combat deflation and halt the rise of the yen, which was severely impacting Japan's export-led economic recovery.