Japan has spent a record 15.4 trillion yen, equivalent to about $96.5 billion, to support the yen over the past month as authorities intensified efforts to halt the currency’s slide to four-decade lows.
The Finance Ministry disclosed the figure on Friday, confirming the historic scale of the intervention between July 30 and August 26.
The intervention came after the yen weakened to nearly 164 per dollar, its lowest level since 1986, prompting Tokyo to take aggressive measures to strengthen the currency and contain rising import costs.
Japan’s latest action was notable for involving rare coordination with the United States and South Korea. The Bank of Japan bought yen on July 30 and 31, while South Korean authorities timed their own intervention in the won market to reinforce the effort.
The move initially produced a sharp response, with the yen strengthening from around 163 per dollar to as much as 155.20 by August 3. However, much of the gain was later erased, with the currency trading between 159 and 160 per dollar on Friday.
The limited and temporary impact has raised questions about how far government intervention can influence currency markets when underlying economic conditions continue to favour a weaker yen.
Japan’s total spending on currency intervention this year has now reached about $170 billion, following earlier operations in April and May as authorities struggled to reverse the yen’s prolonged decline.
Analysts at Citi said the yen remained under pressure partly because foreign investors selling the currency to hedge exchange-rate risks when investing in Japan’s strong stock market had continued to weigh on its value.
The interest-rate gap between Japan and the United States has also remained a major factor behind the yen’s weakness. Investors have continued to favour dollar-denominated assets because of the higher returns available in the United States.
The Bank of Japan kept its benchmark interest rate unchanged at its July meeting, although officials have recently signalled a willingness to accelerate monetary tightening.
Markets are increasingly expecting the central bank to raise interest rates at its September 17–18 meeting. Such a move could narrow the gap between Japanese and US interest rates and provide additional support for the yen.
BOJ Deputy Governor Ryozo Himino reinforced those expectations on Thursday, warning of the risk of falling behind the curve if policymakers fail to act in a timely manner.
The latest intervention was the first coordinated US-Japan action to strengthen the yen since 1998. US Treasury Secretary Scott Bessent has backed Tokyo’s efforts, warning that excessive yen weakness could trigger broader currency devaluations and create economic problems for the United States.
Japan is particularly vulnerable to a weak currency because it imports most of its energy and other essential commodities. A weaker yen raises the cost of imports, adding pressure on households and businesses while increasing production costs for the economy.
Finance Minister Satsuki Katayama said Friday that Japan would strengthen the yen’s credibility by improving the country’s long-term competitiveness and economic growth potential, while stressing that coordination with the United States remained extremely strong.
The record intervention demonstrates Tokyo’s determination to defend the yen, but the currency’s failure to sustain its initial gains suggests that intervention alone may not be enough. A lasting recovery will likely depend on Japan’s monetary policy, economic fundamentals and efforts to improve its long-term competitiveness.
