Japan's Finance Ministry on September 9 released data showing the country spent a total of ¥15.4 trillion (equivalent to $96 billion) in July and August to buy the yen, aiming to stem the domestic currency's decline on international markets. This marks the highest spending level ever recorded for Japan's forex intervention over a two-month period.
Of this amount, roughly ¥5.5 trillion was spent during the coordinated intervention with the U.S. on August 11, when the yen fell to multi-decade lows against the dollar. Japan's previous intervention occurred in April and May, with total spending of about ¥9.8 trillion, but this time the outlay far exceeded that due to pressure from a strong dollar and the wide interest-rate gap between the U.S. and Japan.
The intervention came as the yen continued to weaken, driving up Japan's import costs and hitting consumers and businesses. Japanese officials repeatedly warned they would act decisively to counter excessive volatility in the foreign exchange market.
However, analysts argue the impact of such interventions is only temporary, as the Bank of Japan's monetary easing strategy remains at odds with the U.S. Federal Reserve's tightening policy. The yen rose slightly after the interventions but remains weak against the dollar.
The first joint U.S.–Japan intervention in years underscores the severity of the situation, drawing close attention from Asian financial markets to further developments in the yen/dollar exchange rate.
