Japan Likely Sold Treasuries to Fund Record Yen Intervention

Japan likely sold a portion of its foreign securities, including U.S. Treasurys, to fund its record currency intervention over the past month, according to Finance Ministry reserve data released on Monday. The ministry confirmed that authorities spent the equivalent of a monthly record ¥15.4 trillion ($98.6 billion) in the month through Aug.

26, with part of the operation conducted jointly with the U.S. While the data does not provide a detailed breakdown of securities holdings or maturities, market participants estimate that roughly 70% of Japan's foreign reserves are invested in U.S. Treasurys. The price of 10-year Treasurys at the end of August was only slightly down from the end of July, suggesting that valuation changes accounted for only a very small portion of the fall in foreign securities.

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