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.