Japan's foreign reserves drop by a record $80 billion in August following yen intervention
Japan's foreign reserves dropped by a record $80 billion in August due to government interventions to support the yen. This marks the largest monthly decline since 2000 as Tokyo coordinates with Washington to stabilize currency markets.
Why it matters
Demonstrates the scale of central bank intervention in global currency markets and the impact on national reserves.
Japan's foreign reserves have fallen at their fastest pace since ministry records started in 2000, slumping 6.18% in August.
Finance ministry data showed that foreign reserves stood at $1.207 trillion, down from July's figure of $1.287 trillion.
This is the fourth straight month of decline, and surpassed the previous record in May, when reserves had dropped 5.58%.
While the finance ministry did not give the reason for the decline, Japanese media outlet Kyodo News cited an unnamed finance ministry official, saying the drop was due to interventions aimed at propping up the yen and a decline in the value of government bonds, following a jump in yields.
Global bond yields have been climbing to multiyear highs, with yields in Germany, the UK, and U.S. Treasuries hitting sharp milestones.
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