The total value of Japan’s interventions to ease pressure on the yen reached 15.3993 trillion yen between July 30 and August 26. Japan’s Ministry of Finance said the amount was equivalent to approximately $96 billion.
The spending exceeded the previous monthly record of $73.4 billion, recorded during three separate rounds of intervention in April and May. Market expectations for the latest operations ranged from $68.9 billion to $75.2 billion.
Japan and US intervene jointly
After the dollar rose to as high as ¥163.99 on July 23, Japanese officials intervened in the foreign exchange market on July 30. Japan and the US conducted a coordinated operation during New York trading on July 31.
The move marked the first joint currency intervention by the two countries in 15 years. After the operation, the dollar briefly fell below ¥155 but later recovered and began trading at around ¥159.
Pressure on yen persists
Concerns about Japan’s fiscal outlook also contributed to selling pressure on the yen. The Sanae Takaichi government continued its expansionary spending policy without presenting a detailed financing plan, increasing concerns about fiscal policy.
Uncertainty surrounding the war in Iran also increased demand for the dollar, seen as a safe haven, intensifying pressure on the yen. The yen’s weakness is raising the cost of imported energy, food and raw materials, increasing inflationary pressure on Japanese households and businesses.