Japan's Foreign Reserves Plummet Amid Record Yen Intervention

Japan's foreign currency reserves dropped to $994.9 billion in August, marking the first time since recent memory that they've fallen below the psychologically important $1 trillion mark.

This significant drawdown of nearly $100 billion is attributed to a record yen intervention by Japan's Ministry of Finance between July 30 and August 26, totaling ¥15.3993 trillion ($96.5 billion).

The funds for this intervention were sourced from the liquidation of foreign securities, with holdings of US Treasuries dropping $87.8 billion month-over-month in August.

This development is particularly noteworthy as it marks a rare joint operation between Japan and the US, with the two countries conducting a coordinated yen-buying intervention on July 31 for the first time in approximately 28 years.