📈 Japan’s Reserves Drop by Record $79.6 Bn Following FX Intervention

• Reserve Drop & Totals: Foreign exchange reserves fell by a record $ 79.6 Bn (-6.18% MoM) to $ 1.2 Tn in August. Foreign securities, primarily US Treasuries, make up ~70% of reserves. • Intervention Scale: Spent a record ¥ 15.4 Tn ($ 98.66 Bn) from 30 July to 26 August on dollar-selling and yen-buying operations to support the currency. • Yen Performance: FX moves lifted the yen from near a 40-year low (~¥ 164/US$) to ¥ 155.20 on 3 August, before fluctuating around ¥ 155–156 in early September. Operations included a joint intervention with the US. • Sri Lanka Relevance: Volatility in major currencies like the yen impacts bilateral trade, official development assistance (ODA), and external debt valuations, while testing global market liquidity for emerging markets.