Yomiuri Shimbun Staff Writer

Japan's foreign exchange reserves saw a record monthly drop of 79.5 billion dollars, or 6.2%, to stand at 1.2 trillion dollars at the end of August, the Finance Ministry announced Monday.

It was the fourth straight monthly decline and the biggest since comparable data became available in April 2000. It reflects the use of foreign exchange reserves to fund currency interventions by the government and the Bank of Japan.

The government and the central bank conducted yen-buying, dollar-selling interventions from July 30 to Aug. 26, totaling 15.39 trillion yen -- the largest amount in a one-month period. The latest drop exceeded the monthly decrease recorded through the end of May -- a monthly drop of 77.1 billion dollar -- which reflected yen-buying interventions in April and May.

The total intervention amount does not fully reflect the net decrease in foreign reserves as some assets like gold increased in dollar terms.

Among foreign exchange reserves, securities such as U.S. Treasury bonds saw a monthly drop of 87.7 billion dollars to stand at 839.5 billion dollars at the end of August. This is believed to be due to the government selling foreign bonds to secure funds for the intervention.

----

This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

YDN-M0000231122-1