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Japan likely sold US Treasuries to fund record yen intervention

Japan appears to have sold foreign securities, including US Treasuries, to finance last month’s record currency intervention. Ministry of Finance data released Monday showed foreign securities holdings fell by a record $87.8 billion in August, roughly matching the scale of intervention. Analysts suggest short-term US debt was likely sold. Officials previously confirmed spending ¥15.4 trillion ($98.6 billion) in the month through August 26, partly coordinated with the US.

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AI take

The data points to a concrete funding source for Japan's intervention, moving the discussion from speculation to balance-sheet reality. Selling foreign securities, likely short-term US debt, means the operation's cost is now visible in official holdings, which could constrain the scale of future interventions if reserves are perceived as stretched. The coordination with the US adds a layer of policy signaling, suggesting that the intervention was not unilateral. The open question is whether this pattern of selling Treasuries will continue if yen pressure persists, which would link Japan's currency policy more directly to US debt markets and potentially influence yield dynamics.

Generated by AI for reference only.

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