Japan’s Finance Ministry announces $54B reduction in forex reserves

Japan’s foreign currency reserves fell by a record $54 billion to $1.238 trillion at the end of September, the largest monthly decline on record, after the first intervention in 24 years to arrest the yen’s rapid depreciation, according to the Finance Ministry, Report informs referring to The Mainichi.

Among the reserves, securities, which include US Treasuries, decreased to $985.27 billion from $1.036 trillion at the end of August, marking the largest decline for a month. Deposits were almost flat at $136.11 billion.

Japan’s foreign currency reserves fell to their lowest level since the end of March 2017.

Finance Minister Shunichi Suzuki has said the yen-buying, dollar-selling intervention on September 22, which likely cost a record 2.84 trillion yen ($20 billion), had a "certain effect" and served as a warning to speculators who were behind the yen's sharp slump to its 24-year low versus the US dollar.

Market watchers have said deposits can be tapped for immediate use in stepping into the market, and any impact of the intervention by Japanese authorities will be short-lived.

The Finance Ministry did not disclose which assets were used for the recent intervention.