Japan spent ¥27 trillion defending the yen; it is back near 157

Japan's finance ministry reports ¥27.1 trillion of yen buying across two campaigns this year, one of them joined by the U.S. Treasury, and on Sept. 21 the yen sat near 157 per dollar, back in the range the Fed's daily series recorded in the first days after that joint action.

Key points

• Currency intervention means a government selling reserves it holds in one currency to buy its own, trying to reverse a price that private trading set. Japan publishes what it spends. Its monthly release of Aug. 28 puts intervention operations for July 30 through Aug. 26 at ¥15,399.3 billion.
• That followed a spring round. The ministry's quarterly release for April through June gives three dated operations, all selling U.S. dollars to buy yen: ¥6,278.7 billion on April 30, ¥780.2 billion on May 4 and ¥4,675.9 billion on May 6, for a quarterly total of ¥11,734.9 billion. The two buckets add to ¥27,134.2 billion, about $172 billion converted at the Fed's Aug. 7 daily rate of 157.54 — our arithmetic, not a figure either government publishes, and the two periods are not strictly comparable, since one is a quarter with daily detail and the other a monthly lump sum.
• Japan's reserve accounts move with it. The ministry's monthly reserves releases put total official reserve assets at $1,287,099 million at the end of July and $1,207,524 million at the end of August, a drop the ministry puts at $79,575 million. The end-of-May release reports $1,305,874 million, down $77,120 million from April, which puts April at $1,382,994 million. Those drops are not a clean measure of what intervention cost, because the same table moves with valuation changes and other holdings, but the order of magnitude matches.
• The July 31 operation was joint, which is the rare part. Finance Minister Katayama Satsuki's statement of Aug. 3 says the ministry bought yen in coordination with the U.S. Treasury on Friday, July 31, U.S. Eastern time, and adds: "We will not hesitate to conduct further joint intervention." The ministry says the action was taken pursuant to a U.S.-Japan finance ministers' joint statement issued in September 2025, without giving a date; the statement Treasury published on Sept. 11, 2025 says intervention should be reserved for excess volatility and disorderly movements, and treats disorderly depreciation and appreciation alike. We found no U.S. statement invoking it for this particular operation.
• Treasury has never said what it spent. Its own weekly reserve reports leave a trail, though the table combines the Exchange Stabilization Fund with the Fed's own account rather than isolating Treasury's: yen holdings were $11,521 million on July 24 and $12,477 million on Aug. 7. Holding that position fixed and revaluing it from 163.71 to 157.54 yen per dollar would have produced $11,972 million, leaving about $505 million unexplained by the price move. That is our estimate from public data, sensitive to the rates used and to anything else that touched the account; it is not a disclosed number. Senator Elizabeth Warren's letter notes a photographed notepad reading buy $5-10 billion of yen, a figure Treasury has not confirmed.
• Warren, ranking member on Senate Banking, wrote to Secretary Scott Bessent on Aug. 13 with five questions and an Aug. 28 deadline. The letter says Treasury used the Exchange Stabilization Fund under the Gold Reserve Act of 1934, that the New York Fed sold euros to fund the yen purchase through Goldman Sachs and Morgan Stanley, and — citing Financial Times reporting we did not independently reach — that the European Central Bank was not told in advance. It counts this as only the third U.S. yen intervention in thirty years, after 1998 and 2011.
• The pressure pushing the other way is a rate gap. The Fed raised its target range a quarter point to 3.75-4.00% on Sept. 16 on a 12-0 vote. The Bank of Japan raised its policy rate to around 1.25% on Sept. 18 by a 7-2 vote, effective Sept. 24, with Asada Toichiro and Sato Ayano dissenting — Asada because consumer prices excluding fresh food were still rising at under 2%, Sato because conditions had not accelerated enough. That leaves 2.50 to 2.75 percentage points between the two policy rates. The BOJ's own statement lists the depreciation of the yen, alongside crude oil prices and AI-related demand, among the forces pushing Japanese producer prices up.
• On the Fed's daily series the yen hit 163.86 per dollar on July 29 — by our parse of the full series back to 1971, the weakest daily reading since Dec. 16, 1986 — then recovered to 153.71 by Sept. 11, the last day the Fed has published. Reuters reported the yen at 157.44 on Sept. 21 with Japanese markets closed for a three-day holiday, and relayed a Nikkei report that officials had run rate checks — calls asking banks for quotes, which Reuters describes as often seen as a precursor to intervention. No Japanese official has confirmed those calls, and the ministry's release covering late August and September is not out yet, so there is no primary record of what, if anything, has been spent since.

Whether any of this worked is genuinely contested, and the honest answer is that the public record does not settle it: Warren's letter argues the yen surrendered half its post-intervention gain, while the two governments describe the action as countering disorderly moves rather than setting a level. What is not in dispute is how the exchange rate shows up in an ordinary budget. Using the Fed's own daily rates, $100 bought ¥15,264 at this year's strongest point for the yen on Feb. 12 and ¥16,386 at its weakest on July 29 — a 7.4% swing in the dollar price of a flight, a hostel or an imported camera, with no decision by the buyer involved. The other end reaches Pennsylvania more quietly. The same Fed rate that widened the gap against Japan is the one American borrowing costs move with, and Japan is the largest foreign holder of U.S. government debt, at $1,103.9 billion in July per Treasury's TIC data, ahead of the United Kingdom's $998.3 billion. When Tokyo sells reserves to buy yen, it is drawing down the same pile that helps finance American borrowing.

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