Japan Forex Reserves Fall Further in September

Japan’s official reserve assets fell by USD 29.1 billion, or 2.4%, to USD 1.178 trillion at the end of September 2026 from USD 1.208 trillion a month earlier, extending the decline following August’s record drop. The decrease was led by foreign currency reserves, which fell to USD 976.9 billion from USD 995.0 billion, with securities declining to USD 821.7 billion from USD 839.6 billion. Deposits with foreign central banks and the Bank for International Settlements edged down to USD 154.8 billion from USD 155.0 billion. Gold reserves also fell to USD 113.6 billion from USD 124.1 billion, while SDR holdings declined to USD 60.8 billion and the IMF reserve position to USD 11.3 billion. Other reserve assets stood at USD 15.8 billion. The latest decline follows the record USD 79.6 billion drop in August, when Japan spent ¥15.4 trillion on yen-buying intervention to support the currency.

Japan’s foreign reserves fell by a record USD 79.6 billion, or 6.18%, to USD 1.208 trillion at the end of August 2026 from USD 1.287 trillion a month earlier, marking their lowest level since October 2022. The sharp drop came after Tokyo launched its largest-ever yen-buying intervention, spending ¥15.4 trillion ($98.7 billion) between July 30 and August 26 to curb persistent weakness in the currency. The decline was driven mainly by foreign securities, held largely in US Treasuries and accounting for about 70% of Japan’s reserves. The intervention helped strengthen the yen from around 164 per dollar to as high as 155.20 by August 3, although it later weakened toward 160 before recovering to around 155-156 in early September. Part of the operation was conducted jointly with the United States, marking the first coordinated intervention by the two countries since 2011. Japan could also tap a Federal Reserve backstop to raise dollar liquidity without outright selling US Treasuries.

Japan’s foreign reserves fell by USD 0.38 billion to a sixteen-month low of USD 1.287 trillion at the end of July 2026 from USD 1.288 trillion in June, extending the previous month’s decline. Foreign currency reserves stood at USD 1.090 trillion, consisting of USD 927.33 billion in securities and USD 162.29 billion in deposits. Of the deposits, USD 161.85 billion were held with foreign central banks and the Bank for International Settlements (BIS), while deposits with banks headquartered in Japan totaled USD 407 million and those with banks headquartered outside Japan amounted to USD 25 million. Japan's IMF reserve position stood at USD 11.38 billion, SDR holdings were valued at USD 60.73 billion, and gold reserves totaled USD 109.52 billion. Other reserve assets amounted to USD 15.86 billion, while other foreign currency assets stood at USD 33.92 billion.