Yichang, China – August 3: A netizen displays Japanese yen and US dollars on August 3, 2026 in Yichang, Hubei Province, China. Japan and the United States confirmed last week that they had jointly intervened to stop the yen from weakening, after the value of the yen fell to a 40-year low. (Photo credit: Liu Junfeng/VCG, Getty Images)
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Japan’s foreign exchange reserves are declining at the fastest pace since the ministry began keeping statistics in 2000, falling 6.18% in August.
Foreign exchange reserves stood at $1.207 trillion, down from $1.287 trillion in July, according to Treasury data.
This was the fourth consecutive month of decline and exceeded the previous record of 5.58% in reserves in May.
The Ministry of Finance did not give a reason for the decline, but Japanese media outlet Kyodo News cited an unnamed finance ministry official as saying the decline was due to interventions aimed at supporting the yen and a drop in the value of government bonds as yields soared.
Global bond yields have risen to multi-year highs, with yields on German, British and US government bonds hitting significant milestones.
“The decline is primarily a result of Japan’s recent currency intervention, selling the dollar and buying the yen,” Masahiko Lu, senior fixed income strategist at State Street Investment Management, told CNBC.
The Japanese government has carried out multiple interventions to support the yen over the past few months, buying about 11.73 trillion yen ($75.26 billion) in April and May, followed by a larger intervention of 15.4 trillion yen at the end of July, supplemented by the US selling euros to support the yen.
The total amount disbursed so far is 27.1 trillion yen, the largest annual amount ever spent in an intervention, surpassing the previous record of 20.4 trillion yen set in 2003, according to Ministry of Finance data.
The move with the US government also marked the first coordinated intervention by the two countries to support the yen since 1998.
of circlehit a 40-year low of $163.98 on July 23, and is currently trading at $155.98 against the dollar.
Asked whether the decline in foreign exchange reserves should worry investors, State Street’s Lu said: “This decline reflects policy action rather than financial stress.”
