On July, Japan's intervention in the foreign exchange market revealed a scale of 55 trillion yen!

According to the VESYNC Financial APP, in the past month, Japan has spent ¥55 trillion (US$366 billion) to support the yen in the foreign exchange market. Previously, the Japanese government expressed its intention to combat speculators shorting the yen.

The Ministry of Finance of Japan released data from June 27 to July 29. The amount matches the estimates previously made based on the accounts of the Bank of Japan and currency brokers.

Prior to the intervention in July, Japan had also taken similar actions in April and May, highlighting the government's determination to combat foreign exchange speculation. Combined with increasing speculation that the significant interest rate differential between Japan and the United States would begin to narrow, Japan's recent measures appear to have helped reverse the weakening trend of the yen.

After the data was released, the yen to dollar exchange rate remained almost unchanged, rising by about 1.7% intraday.

During the period described in this report, the yen experienced two significant appreciations. The first fluctuation occurred on the evening of July 12, when the United States announced weaker-than-expected inflation data, causing the yen to appreciate significantly from 161.58 to 157.44 against the dollar. The second fluctuation occurred on the next trading day, with the yen rate rising by 0.9%. Since then, the yen rate has risen significantly.

Tohru Sasaki, Chief Strategist at Fukuoka Financial Group, stated, "This is a good time for the government to intervene in the market - just as the yen is about to appreciate."

Meanwhile, given that Japan has already used a large amount of funds to intervene in the market this year, "if the yen returns to its previous lows, it will be difficult for the authorities to use the same scale of funds again," Sasaki said. The intervention measures since April this year have cost the country approximately ¥15 trillion.

After comparing the final version of the Bank of Japan's current account data with the estimates of currency brokers, it was found that Japan may have spent around ¥3 trillion and ¥2 trillion on these operations, respectively. These predictions may differ from the actual amounts confirmed by the Ministry of Finance data.

Before the release of the intervention data on Wednesday, the Bank of Japan decided to raise interest rates again and announced a plan to reduce the scale of bond purchases slightly faster than expected. The central bank raised the policy rate from 0-0.1% to around 0.25% and announced a plan to halve bond purchases by the first quarter of 2026. Bank of Japan Governor Haruhiko Kuroda did not rule out the possibility of further rate hikes, and the yen strengthened further after the press conference.

Jun Mimura, who took over from Makoto Kanda as the country's top monetary official on Wednesday, had previously stated that intervention remains a method to combat speculation. He also mentioned that the negative impact of the recent yen weakness is becoming increasingly evident due to rising import costs affecting households and small businesses.

After being suspected of intervening in the foreign exchange market in July, Japanese Finance Minister Toshihiko Suzuki and Makoto Kanda both declined to comment on whether they intervened in the market, maintaining a strategy of speculation for investors. Jun Mimura seemed to imply that he might continue this stance More details on this month's market actions, including daily amounts and specific markets entered by the government, will be announced in November. In addition, clues will be provided by the foreign exchange reserve data to be released next week, indicating whether the Japanese government is selling government bonds or using deposits to fund the purchase of yen