Japan Forex Reserves Stabilize After Record Yen Intervention

Japan’s official reserve assets edged up by USD 723 million to USD 1.179 trillion at the end of October 2026 from USD 1.178 trillion a month earlier, recovering slightly after September’s USD 29.1 billion decline. The increase was driven by foreign currency reserves, which climbed to USD 985.2 billion from USD 976.9 billion, with securities rising to USD 834.6 billion from USD 821.7 billion. However, gold reserves fell to USD 106.4 billion from USD 113.6 billion, while deposits declined to USD 150.7 billion from USD 155.2 billion. SDR holdings stood at USD 60.6 billion and the IMF reserve position at USD 11.2 billion. Japan's Finance Ministry disclosed that the country spent a record ¥15.4 trillion buying yen over three consecutive days in late July, including a daily record ¥7.98 trillion on July 30. The intervention included a rare coordinated operation with the United States on July 31, the first such joint action since 1998.

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.