Japan’s foreign exchange reserves fell by a record $79.6 billion in August due to record-scale interventions in the yen.

(1) According to data from Japan's Ministry of Finance, as of the end of August, Japan's foreign exchange reserves decreased by a record $79.6 billion from the previous month to $1.208 trillion, representing a month-on-month decline of 6.18%. (2) The main reason for the reserve decline is a sharp reduction in foreign currency securities holdings, most of which are U.S. Treasury bonds acquired by Japan during its dollar-buying intervention about 20 years ago, accounting for about 70% of the foreign exchange reserves. (3) This record decline is directly related to the unprecedented scale of dollar selling and yen buying intervention measures initiated by Tokyo last month, aimed at curbing the ongoing weakness of the yen.