Japan spent record USD96bn in yen interventions

Business Recorder reported that Japan spent 15.4 trillion yen, about USD 96 billion, to prop up its currency from late July through late August, according to the finance ministry. The Friday statement described this as the biggest monthly effort of its kind on record. The Bank of Japan carries out such purchases on the ministry's instructions to cushion the economy from abrupt swings in exchange rates.

The yen has weakened amid interest rate differences between Japan and the US, expensive oil, and worries that Prime Minister Sanae Takaichi's spending plans would push Tokyo's debts even higher. Despite earlier interventions and warnings from Finance Minister Satsuki Katayama that Japan stood prepared to step in, the currency kept sliding. Japan and the United States jointly intervened for the first time in 28 years on July 31, when the yen had sunk to a four-decade low.

President Donald Trump confirmed the joint action, calling it a gesture of friendship toward Japan. Experts cited in the report added that Washington also wanted to narrow its trade deficit and help Tokyo meet a USD 550 billion investment pledge. A weaker yen benefits large exporters such as Sony and Toyota, yet it raises import costs for resource-poor Japan, especially oil, while the Middle East war restricts Gulf supplies.