Japan likely drew on its holdings of foreign securities, including U.S. Treasurys, to finance its record currency market intervention over the past month, a move that may draw attention from Washington.
Tokyo¡¯s holdings of foreign securities at the end of May dropped by $75.6 billion from April, according to Finance Ministry reserve data released Friday. That scale matches the size of Japan¡¯s recent entry into the currency market to prop up the yen. The ministry confirmed last week that intervention in the month through May 28 hit a record ?11.73 trillion ($73.4 billion).
A ministry official briefing on the foreign reserves report acknowledged that intervention was among the factors behind the sharp drop in holdings of foreign securities, adding that the fall was the largest on record.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.