Japan's Foreign Reserves Plummet by Record $79.6 Billion

Japan's foreign reserves took their largest-ever hit in August, plummeting by a record US$79.6 billion to US$1.208 trillion.

This decline was largely due to a drop in foreign securities, which account for approximately 70% of Japan's reserves and are mainly held in US Treasuries purchased during previous dollar-buying intervention operations.

The Japanese government spent an unprecedented 15.4 trillion yen (US$98.66 billion) on intervention between July 30 and August 26, marking the largest single-month operation on record.

This massive intervention helped stabilize the yen, lifting it from a 40-year low near 164 per dollar to as high as 155.20 by August 3. However, the currency subsequently weakened towards 160 before recovering to around 155-156 in early September.