Japan Sells US Treasuries to Finance Record-Breaking Yen Intervention

Japan has been selling US Treasuries to finance its record-breaking yen intervention, which has raised concerns about supply pressure on US Treasuries. According to data from Japan's Ministry of Finance, foreign exchange reserve holdings decreased by $8.78 billion in August, a figure matching the scale of that month's intervention.

The Ministry of Finance had previously confirmed that authorities spent around ¥15.4 trillion ($98.6 billion) on foreign exchange market intervention in the month ending August 26, setting a new historical monthly record, with part of the operations carried out jointly with the United States.

This large-scale intervention has led to a significant drop in Japan's total foreign exchange reserves, which fell below the $1 trillion threshold to $995 billion. Despite this, authorities believe remaining reserves are sufficient to support future potential intervention actions.