Japan’s finance ministry said Friday it spent $19.6 billion in September in an effort to stop the yen’s steady slide on the widening interest rate gaps between Japan and the US.
In a brief announcement, the ministry said it spent 2.8 trillion yen ($19.6 billion with Friday’s exchange rate) for foreign exchange intervention operations in a month to Wednesday.
The ministry announced on September 22 that it intervened in the market, the first such move to lift the sliding yen since 1998, as the Japanese unit trended at 24-year lows.
The market had initially estimated the size of the intervention to be worth around three trillion yen.
But local media said Friday that the 2.8 trillion yen intervention was still seen as among the largest amounts spent in a one-day step-in by the ministry.
The Japanese government took action as the yen’s depreciation meant increased cost of imports like energy and food, hitting both households and businesses.
The intervention saw the greenback retreat as low as 140.70 yen at one point, but it has since edged its way back, fetching 144.47 yen Friday evening.
The yen has been weakening against the dollar for months as the US Federal Reserve steadily hikes rates to fight inflation.
But the Bank of Japan has maintained its ultra-loose monetary policy in place to safeguard the nation’s fragile growth.
The policy gap makes the yen less attractive against the dollar.