Japan likely sold Treasuries to fund record yen interventionJapan likely sold a portion of its holdings of foreign securities, including U.S. Treasuries, to finance its record currency intervention over the past month, despite concern in Washington over the impact of Treasury sales on long-term yields.
Tokyo’s holdings of foreign securities fell by $87.8 billion at the end of August from a month earlier, according to Finance Ministry reserve data released Monday. That decline was close to the scale of Japan’s recent intervention to support the yen.
The ministry earlier confirmed that authorities spent the equivalent of a monthly record ¥15.4 trillion ($98.6 billion) in the month through Aug. 26, with part of the operation conducted jointly with the U.S. The monthly intervention is also the largest on record.
A ministry briefer said intervention was a factor behind the fall in foreign reserves.
Another intervention financed through sales of U.S. Treasuries would show that Tokyo is still willing to go down that route even as U.S. officials, including Treasury Secretary Scott Bessent, have become increasingly focused on Treasury-market stability, particularly ahead of the midterm elections.
“Japan may have used both foreign securities and deposits, but it most likely sold U.S. Treasuries,” said Atsushi Takeda, chief economist at Itochu Research Institute.
The U.S. participated in Japan’s intervention campaign at the end of July by stepping into the market on July 31 in the first coordinated move between the nations to support the yen since 1998. That shows the two sides are still likely on the same page for now.
https://www.japantimes.co.jp/business/2026/09/07/markets/japan-treasuries-sell-for-yen/
