Japan likely sold a portion of its foreign securities, including US Treasuries, to finance its record currency intervention over the past month. Tokyo’s holdings of foreign securities fell by a record $87.8 billion at the end of August from a month earlier, according to Finance Ministry reserve data. That decline was close to the scale of Japan’s recent intervention to support the yen.

The ministry confirmed authorities spent the equivalent of a monthly ¥15.4 trillion ($98.6 billion) in the month through Aug. 26, with part conducted jointly with the US. Atsushi Takeda, chief economist at Itochu Research Institute, said Japan most likely sold US Treasuries. The US participated in Japan’s intervention campaign at the end of July by stepping into the market on July 31 in the first coordinated move since 1998.

Scott Bessent, US Treasury Secretary, has repeatedly said the yen has weakened too much, explaining US cooperation. Market participants estimate roughly 70% of Japan’s foreign reserves are in US Treasuries. The price of 10-year Treasuries at end-August was only slightly down from end-July, suggesting valuation changes were minor.

Akari Nishimura, economist at Japan Research Institute, warned selling Treasuries could attract US pressure. Foreign currency reserves fell $94.6 billion to $995 billion at end-August, while foreign currency deposits fell $6.9 billion. Markets are pricing in a BOJ rate hike in September following Bessent’s call for higher Japanese interest rates and hawkish BOJ signals.