Japan reports largest-ever monthly drop in foreign reserves

Japan’s foreign reserve assets in May fell 5.6% from the previous month, marking the largest monthly decline on record, the Finance Ministry said on Friday, News.Az reports, citing Xinhua.

Data released by the ministry showed that official reserve assets stood at 1.31 trillion U.S. dollars at the end of May, down 77.11 billion dollars from the end of April. This represents the largest drop in both percentage and absolute terms since comparable data became available in April 2000.

Earlier ministry data on currency market interventions covering the period from April 28 to May 27 indicated that Japanese authorities spent a record 11.73 trillion yen (about 73 billion dollars) to curb the yen’s decline.

The ministry did not disclose detailed breakdowns of transactions linked to the interventions. However, it is likely that some foreign assets were sold to obtain U.S. dollars for yen-buying operations, Kyodo News reported.

Currency markets were highly volatile during the period. On April 30, the yen strengthened sharply, moving from the upper 160 range to around 155. It later weakened again, but on May 1, 4, and 6, it appreciated rapidly from the 157 range back toward 155, reinforcing expectations that authorities intervened again in the market.

News.Az 

By Nijat Babayev