Japan Drops Record $96B to Stem Yen Decline

Japan's Finance Ministry revealed that it spent a record-breaking $96 billion on foreign exchange interventions between July 30 and August 26 to combat the yen's decline. The unprecedented amount of 15.4 trillion yen exceeded market estimates, which ranged from $68.9 billion to $75.2 billion.

The intervention efforts were triggered by the yen's sharp depreciation, with the dollar reaching a high of 163.99 yen on July 23, its highest level against the Japanese currency in around four decades. Japan and the US conducted a coordinated intervention on July 31, marking their first joint operation in 15 years.

The move briefly pushed the dollar down to the lower 155-yen range, but it has since recovered and is trading at around 159 yen. The yen's decline raises concerns about inflationary pressures on Japanese households and businesses due to higher costs of imported energy, food, and raw materials.