Japan's foreign reserves plunged $79.6 billion, the largest one-month drop on record, after the finance ministry sold dollars and bought yen to slow the currency's decline. Reserves are the dollars and other foreign assets a government holds; a sharp drop of this size confirms officials spent heavily rather than relying on warnings alone.
The intervention followed a period in which yen weakness had drawn repeated verbal warnings from Japanese officials without matching action. Separately, traders who had bet against the yen are reportedly growing more cautious now that Tokyo has shown it will spend real money to defend the currency.
What is unresolved is whether one round of intervention is enough to reverse the yen's trend, or whether Japan will need to keep selling reserves in the weeks ahead if depreciation pressure resumes.