Japan's currency intervention last week cost 2.84 trillion yen ($19 billion), the largest-ever amount spent to stem the yen's sharp slide against the U.S. dollar, Finance Ministry data showed Friday.
The yen-buying, dollar-selling operation, Japan's first since 1998, was carried out on Sept. 22, shortly after the Japanese currency plunged past the psychologically-important 145 mark amid prospects that the monetary policies of Japan and the United States would further diverge.
Friday's data covers the period between Aug. 30 and Sept. 28, and no daily breakdown was disclosed. Previously, 2.62 trillion yen spent on April 10, 1998, was the largest on record.
Market analysts doubt such direct intervention, seen as a last-resort move, will have a lasting impact at a time when the dollar is broadly strong against its counterparts supported by higher U.S. Treasury yields.
Finance Minister Shunichi Suzuki has said the rare intervention was aimed at "correcting" speculative moves in the currency market, warning that Japan will take further steps if needed as currency movements should be stable, not "rapid and one-sided."
Japan had around $1.29 trillion in foreign currency reserves, which include securities and deposits at the end of August. Of the total, about $136 billion in deposits was seen as ready for immediate use in carrying out the intervention.
The intervention sent the dollar sharply lower by around 5 yen into the 140 yen zone. But it has rebounded since then and was trading below the 145 yen line on Friday.
The yen's rapid-paced depreciation against the dollar has raised alarm among Japanese authorities, and Bank of Japan Governor Haruhiko Kuroda has said volatile yen movements are negative for the economy. A weak yen inflates import costs of energy, food and other raw materials for resource-poor Japan.
Tatsuo Yamasaki, who served as the country's top currency diplomat between 2014 and 2015, said the intervention has proven effective in curbing excessive volatility in the market, getting across the message that Japanese authorities will not tolerate rapid fluctuations.
"If speculators get the wrong idea that there will be no more intervention and the yen starts a rapid fall, then authorities will likely step in again," Yamasaki told Kyodo News.
Still, market participants say such direct intervention, especially if it is carried out unilaterally by Japan without the United States or Europe, cannot reverse the trend.
"Coordinated intervention is extremely rare, something that takes place once in decades," said Yamasaki, a former vice finance minister for international affairs. "The basic way is to gain understanding from other nations and step into the market alone."
The Group of Seven advanced economies have maintained that excess volatility and disorderly movements in the currency market threaten economic and financial stability.
The BOJ has been swimming against the global tide of monetary tightening, sticking to its ultralow rate policy. It looks set to keep its dovish stance for the time being, a major factor driving the yen to its lowest level in 24 years versus the dollar.
The U.S. Federal Reserve has already entered a rate-hike cycle, with more increases expected to tame soaring inflation.
Japan also stepped into the market by selling the yen for dollars in the aftermath of the major 2011 earthquake and tsunami that led to meltdowns at the Fukushima Daiichi nuclear power plant.
At the time, the yen's strength was a headache for the country after it appreciated to around 75 to the dollar. The biggest yen-selling, dollar-buying intervention of 8.07 trillion yen was conducted on Oct. 31, 2011.