Japan's foreign exchange reserves decreased by more than ¥12 trillion, marking the largest drop since records began in 1996, according to data released by the Ministry of Finance on June 5, 2026 [1]. As of the end of May, Japan's foreign reserves stood at $123.98 billion, down approximately $77.2 billion (over ¥12 trillion) from the end of April [1]. The Ministry of Finance attributed this significant decline primarily to yen-buying and dollar-selling interventions conducted between late April and early May [1].
Foreign reserves are assets held by central banks, including foreign currencies, securities, and gold, used to stabilize currency markets and for emergency payments [1]. Market participants noted that the sharp decrease in reserves was a direct result of the currency intervention, and they expressed concerns that continued pressure on the yen could lead to further interventions or changes in reserve levels [1].
The yen exchange rate remains volatile, and both the market and analysts are closely monitoring future actions by the government and the Bank of Japan, as well as the trajectory of Japan's foreign reserves [1].
CONCLUSION
Japan's record decline in foreign reserves underscores the scale of recent yen-buying interventions. Market participants are watching closely for further government or Bank of Japan actions as yen volatility persists and reserve levels remain under scrutiny.