Japan's foreign reserves drop by a record $80 billion in August following yen intervention

Japan's foreign reserves plunged $80 billion in August to $1.207 trillion, down from $1.287 trillion in July, marking a 6.18% monthly decline—the steepest drop since the finance ministry began tracking the data in 2000.

The historic drawdown follows Japan's intervention in currency markets to support the yen, which had weakened sharply against the dollar earlier this year. The August decline dwarfs previous monthly swings and signals the scale of resources Tokyo deployed to stem the currency's slide.

Foreign reserves—primarily held in U.S. Treasuries and other dollar-denominated assets—serve as Japan's main ammunition for currency intervention. The magnitude of the August drop underscores the intensity of official action during the month, as authorities stepped in to slow the yen's descent past key psychological levels.

The $80 billion depletion represents roughly 6% of Japan's total reserve buffer, a significant one-month erosion that raises questions about the sustainability of prolonged intervention campaigns if yen weakness resumes.