Japan spent a record $96.4 billion to support the yen

Japan spent $96.4 billion last month to support the yen after the currency plunged to a four-decade low, said Japanese Finance Minister Satsuki Katayama, according to a Bloomberg report. In total, the government spent 15.4 trillion yen on foreign exchange market interventions between July 30 and August 26 — a record amount for a one-month period.

Katayama and US Treasury Secretary Scott Bessent confirmed in early August that on July 31, the countries had coordinated the purchase of yen and the sale of dollars. They stated they would be prepared to return and act in the market without hesitation if required. The amount spent by the US is not included in the Japanese Ministry of Finance data, and according to estimates, it is a smaller amount, whose symbolic weight is greater than its financial weight. US President Donald Trump confirmed the joint purchase at the beginning of the month, calling it a "sign of friendship" with Japan and "a good thing for the global economy."

"It's a huge amount," said Rinto Maruyama, a senior interest rate and currency strategist at SMBC Nikko Securities. "They have already spent 27 trillion yen on interventions this year, and the dollar-yen is still hovering just below 160 yen to the dollar. This shows how strong the underlying pressure for the yen to weaken still is."

The data illustrates the Japanese government's determination to curb further declines in the yen, after the currency wiped out the gains recorded following the purchases made earlier this year, when the currency weakened beyond the 160 yen to the dollar threshold. In the current intervention attempt, the authorities tried new tactics with the goal of surprising traders. For example, the government entered the market a day before the central bank's interest rate decision; in previous purchases, it acted after central bank decisions or following the publication of key macro data.