Japan Spends Record $96 Billion Boosting Yen

Japan's finance ministry revealed that the country spent a record $96 billion to intervene in the foreign exchange market between late July and late August. The intervention aimed to ease economic damage from sharp fluctuations in exchange rates, which have been causing concern due to the gap between Japanese and US interest rates.

The yen has been weakening significantly, hitting a four-decade low of 163.99 per dollar last month before soaring to 157.40 on July 31. This marked the first time since 1998 that Washington and Tokyo bought yen together in an intervention operation.

Experts suggest that the Trump administration's actions also aimed to reduce the US trade deficit, as a weak yen helps Japanese exporters, and to facilitate Japan's investment of $550 billion in the United States under a 2025 trade deal. However, a weak yen can inflate import costs for resource-poor countries like Japan.