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[BUSINESS] · Japan, United States, South Korea · 9 sources

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Japan spends record 15.4 trillion yen to defend yen value

Japan's Ministry of Finance announced that the government spent a record 15.4 trillion yen (approximately $96.5 billion) on foreign exchange interventions between July 30 and August 26 to support the yen. This monthly volume marks the highest ever recorded for the currency's defense.

The interventions were aimed at countering the yen's rapid depreciation, which had seen it approach a 40-year low of nearly 164 per US dollar. This weakness has threatened the profitability of Japanese exporters and increased the cost of imports, particularly energy, of which 95 percent is sourced from the Middle East.

A notable aspect of this period was a rare coordinated intervention with the United States on July 31. Additionally, South Korean officials noted that the Bank of Korea synchronized its own won-buying operations with Japan's actions to enhance market effectiveness.

While the Bank of Japan maintained steady interest rates in July, policymakers have signaled potential monetary tightening. Markets currently estimate a 65 percent probability of an interest rate hike at the upcoming September meeting. Total interventions for 2026 have already reached 27.13 trillion yen, setting a new annual record.

Entities

Bank of Japan · Bank of Korea · Donald Trump · Japan · Ministry of Finance · Ministry of Finance of Japan · United States government

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