Overview

Japan’s Ministry of Finance said today Wednesday that Japan’s foreign exchange reserves fell to $1.255 trillion at the end of May from $1.265 trillion at the end of April.

Impact on Japanese Yen

Notably, the weakness of the Japanese yen has prompted some market observers to expect new BOJ interventions in the country, as the central bank continues its very loose policy despite the tightening of monetary policy by most central banks amid rising inflation.

Government Action to Support Yen

The Japanese yen is slipping to low levels, which has recently prompted government officials to take action to support the currency.

Last year Japan’s finance ministry intervened by investing about $68 billion to support the yen during three different trading sessions: Sept. 22, Oct. 21, and Oct. 24, when the currency was then at 150 against the dollar, the lowest level since 1990. of the year.

Interventions by Bank of Japan

Interventions are usually not announced as the Bank of Japan buys large amounts of local currency using billions of dollars of existing reserves.