The Strategist

Japan's foreign exchange reserves show another decline

11/08/2022 - 10:15

As of October, Japan's foreign exchange reserves decreased for the third consecutive month following a record dip in September.

According to information provided by the Finance Ministry on Tuesday, the decrease in reserves is due to the largest intervention ever, when the yen was bought for dollars.

The information was made public along with a different report that verified Japan did not launch a clandestine intervention in September. On September 22, as promised, it entered the market to purchase yen for dollars, marking Japan's first intervention to boost the yen since 1998.

As the authorities are mute on interventions, market participants are closely watching a variety of foreign assets and keeping an eye on intervention reports for signs on how much Japan is willing to spend to intervene in market mechanisms.