Overview
- Japan spent about ¥15.4 trillion on yen-buying interventions between July 30 and Aug. 26, the ministry of finance reported, producing the largest single‑month intervention on record.
- Monday's MOF data showed foreign reserves fell by a record about $79.6 billion in August to roughly $1.21 trillion, driven mainly by a sharp drop in foreign securities holdings.
- Market reporting and domestic outlets say Tokyo likely liquidated portions of its foreign securities, which are estimated to be roughly 70% invested in U.S. Treasuries, to fund the interventions.
- Officials in Tokyo and Washington confirmed a coordinated U.S.-Japan intervention on July 31 and have signaled the Fed's FIMA repo facility as an alternative to more outright Treasury sales.
- The scale of sales and reserve drawdown raises the risk of upward pressure on U.S. Treasury yields, and investors will watch for further interventions, any Bank of Japan policy shifts, and use of Fed liquidity tools.