Japan reserves plunge record $79.6 billion after massive yen intervention

In August, Japan's foreign reserves experienced a record drop of $79.6 billion as the government intervened to strengthen the yen, according to the ministry's latest report. The central bank's efforts to support the currency were the largest single-month intervention since 2011, with Japan spending a staggering ¥15.4 trillion ($98.66 billion) to buy yen and sell dollars.

This significant intervention led to a 6.18% decline in Japan's total reserve assets, which fell to $1.208 trillion at the end of August from $1.287 trillion the previous month. The primary driver of the drop was the $87.8 billion decrease in foreign securities, which are believed to consist largely of U.S. Treasuries. Japan holds around 70% of its reserves in U.S. government debt, and the scale of the decline in these holdings closely matches the funds required for Tokyo's large-scale intervention.