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The story
From late July into August, the Japanese government and the Bank of Japan carried out ¥15.3993 trillion in FX intervention, pushing this year’s total intervention spending to a record ¥27.1 trillion. Even though it was a joint US-Japan intervention, reports say roughly half of the yen-strengthening effect had already faded by the time it was over. On 5ch, opinions split over how to read the move — is the government profiting by selling its dollar holdings at a high price, or is its wealth simply shrinking as it keeps buying yen to prop it up? — and the debate spilled over into talk of expected rate hikes from September onward and rising interest payments on government bonds.
8/28 (Fri) 19:06 JST
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Foreign exchange intervention carried out by the Japanese government and the Bank of Japan from late July into this month has turned out to total more than ¥15 trillion.
Source: news.yahoo.co.jp / Original article here
What people said
Japan's assets are disappearing like crazy though
> ¥15.3993 trillion in yen-buying, dollar-selling
So that means the Japanese government just pocketed ¥15 trillion
It's nowhere near a profit.
The more yen you buy, the cheaper it gets, so they're losing assets while intervening
What can you even buy with that ¥15 trillion?
Can't stop the yen's slide~
Trump's policies are all pushing inflation and rates higher, which drives yen-weak/dollar-strong.
And yet he keeps telling the Fed to "cut rates"
If tax cuts funded by bonds cause inflation, then they should have done debt-funded tax cuts back during deflation, right?
The US CPI growth for July 2026 is 3.4%.
Japan's CPI growth for July 2026 is 1.9%.
Japan's price increases are just import prices pushing up domestic prices because of inflation overseas — it's not that prices are rising within Japan itself.
Even with the weak yen, Japan's prices are rising less than overseas.
Japan's price increases are being driven by inflation abroad, and Japan is coping with domestic deflation by holding down wages, which suppresses how much of the overseas price rises get passed on to selling prices.
What Japan needs isn't to raise rates and strengthen the yen — it needs to tackle the deflation hidden behind high import prices and raise real wages for the working generation.
Another pointless intervention that went nowhere, again
Where do people like this even get their info from, in an age this flooded with information
Let the yen keep falling, who cares.
Drop the gasoline subsidies too.
Gas could be ¥1000 or even ¥2000 a liter, doesn't matter.
If logistics collapses the public suffers, so just subsidize diesel for the logistics industry alone
Well, they already sold off the US Treasuries.
Now it's sitting in a bank account, paying fees out of tax money.
Guess the Finance Ministry's worried it'll lose its cushy amakudari (post-retirement job placements at firms it once regulated) slots lol
I'm not talking about overseas effects.
If debt-funded tax cuts cause inflation, then they should have done debt-funded tax cuts during deflation, right?
Taxes are a system where a share of the value created within Japan is collected and reinvested into society. Government bonds are a way of borrowing against value Japan will create in the future.
For a growing economy like China's or America's (where value-creating capacity keeps expanding), even snowballing debt doesn't raise doubts about future repayment.
But for a country like Japan, where deflation from a shrinking, aging population is shrinking domestic demand, snowballing debt raises doubts about whether it can be repaid, and fewer and fewer people want to hold it.
If bonds are used to fund tax cuts or handed out as welfare to people who aren't creating value, that just makes it even less attractive to hold, worsens the weak yen further, and keeps pushing down real wages for the working generation.
The goal is to force speculators to cut their losses on their positions,
so the goal's actually been achieved
Exactly, the goal is to wipe out the heavily-leveraged speculators as a warning to others.
It's fine if it goes back to where it was.
There'll probably be a rate hike next month anyway, so buying time is good enough.
I think 2 hikes this year and 4 next year puts the policy rate around 2.5%
They ran a weak-yen policy, which is exactly why they had to intervene in the first place.
Big losses from the weak-yen policy.
Big losses from the intervention.
.
They bought US Treasuries cheap and are selling them high, they're sitting pretty. Where's the big loss?
Go relearn some economics
Why'd you think it was a loss?
Yen-buying intervention means selling dollars they bought cheap, now that they're expensive
How does rising interest payments make things better?
Are you out of your mind? lol
Sure, interest payments on government bonds go up.
But there's also income coming in from financial assets.
You have to calculate both together.
The MOF's Financial Bureau actually has a mechanism for simulating this as "net interest payments" — it's basically ALM (asset-liability management), like what banks do.
For some reason they seem to keep it quiet from the public though lol
Not just the public either — apparently even Diet members aren't told about it when they cry "interest payments are a disaster!"
Interest payments are projected to rise from ¥13 trillion in FY2026 to ¥35.9 trillion by FY2035. And if rates come in 1 point higher than expected, that hits ¥45.2 trillion in FY2035.
https://www.tokyo-np.co.jp/article_photo/list?article_id=511895&pid=2734147
You really think there's enough tax revenue to cover that? lol
That's not right, you'll see if you read the article at the link below — though this is just one person's take
https://toyokeizai.net/articles/-/860321?page=2
If they get to 1.75% (close to neutral) within the year, yen carry trades would shrink quite a bit
Raising rates is idiotic
If they don't raise rates, long-term yields are gonna get ugly lol
Background and Key Points of This Debate
Foreign exchange intervention is an operation where the government draws down its foreign currency reserves (mainly US Treasuries) to sell dollars and buy yen, funded through the Foreign Exchange Fund Special Account. Selling dollars bought cheap at a higher price generates an accounting profit, but the more the government intervenes to buy yen, the more dollar supply floods the market, which tends to erode the intervention’s own effectiveness — a structural dilemma. What split opinion on the thread was whether to view this operation as “profiting from the spread” or as “a costly holding action,” a difference of perspective that stems from the very nature of FX intervention itself, meaning neither view is simply wrong. The discussion also brought up the BOJ’s expected rate hikes and projections for rising interest payments on government bonds (from ¥13 trillion in FY2026 to ¥35.9 trillion in FY2035, or ¥45.2 trillion if rates run 1 point higher than expected) — but it’s worth noting these figures aren’t directly caused by the FX intervention; they’re being cited as a separate fiscal indicator.
*This article is excerpted and summarized from the 5ch (News Speed+) thread “[Dollar-Yen Rate] July-August FX intervention totals ¥15.4 trillion — even with joint US-Japan intervention, half the yen-strengthening effect has already faded — this year’s total FX intervention already hits a record ¥27.1 trillion.”
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