Japan's foreign reserves drop by a record $80 billion in August following yen intervention — SkimNews
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- Japan saw its foreign reserves fall by $80 billion in August to $1.207 trillion, the largest monthly decline since record-keeping began in 2000
- Finance ministry data showed reserves dropped 6.18% in August, surpassing the previous record 5.58% decline in May
- Tokyo conducted multiple dollar-selling, yen-buying interventions, spending a combined 27.1 trillion yen so far this year—the most ever in a single year
- The U.S. and Japan executed a coordinated intervention at the end of July, marking the first joint action to support the yen since 1998
- Masahiko Loo of State Street Investment Management stated the reserve drop reflects deliberate policy action, not financial stress
- Global bond yields rose to multiyear highs, contributing to the decline in reserve value due to falling government bond prices
Why it matters: Japan has now spent more on FX intervention in one year than ever before, with over $190 billion deployed, signaling escalating commitment to stabilize the yen. This scale of action increases pressure on future monetary flexibility, especially as bond market moves amplify reserve volatility beyond direct intervention costs.
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