Fed’s FIMA Repo Facility Went Unused Last Week, Signaling Japan Did Not Use It to Support the Yen
The Federal Reserve’s rarely used liquidity facility recorded no activity last week, again indicating that Japan did not use it during its latest effort to support the yen. Meanwhile, foreign monetary authorities placed more cash with the Fed. The average balance in the Fed’s Foreign and International Monetary Authorities, or FIMA, repo facility was zero for the week ended Aug. 12, according to the Fed’s latest data. During the same period, usage of the Fed’s foreign reverse-repo pool increased by about $40 billion to $357 billion, its highest level since Nov. 5 and its largest weekly increase since November 2022. Non-U.S. entities can place overnight funds in the pool and earn a market rate, currently 3.5%. Market participants are closely watching whether Japan will intervene again and whether it will follow through on its commitment to use the FIMA facility, rather than allow maturing government bonds to roll off its balance sheet naturally or sell U.S. government bonds outright. The Andersen Institute for Finance and Economics cited the latest annual report issued by Japan’s Ministry of Finance in March 2026, which said securities maturing in one year or less accounted for 26.1% of Japan’s foreign-exchange reserves. Those reserves include securities and cash. “There is evidence that Japan is consuming assets at the short end of the maturity structure to conduct this intervention,” said Rashad Ahmed, an economist at the Andersen Institute. “Even if they are currently relying primarily on reducing short-term securities, it is unclear how long that can continue. In my view, if Japan needs to support the yen for longer, it may need to begin selling longer-term securities.”
The average balance in the Fed’s Foreign and International Monetary Authorities, or FIMA, repo facility was zero for the week ended Aug. 12, according to the Fed’s latest data. During the same period, usage of the Fed’s foreign reverse-repo pool increased by about $40 billion to $357 billion, its highest level since Nov. 5 and its largest weekly increase since November 2022. Non-U.S. entities can place overnight funds in the pool and earn a market rate, currently 3.5%.
Market participants are closely watching whether Japan will intervene again and whether it will follow through on its commitment to use the FIMA facility, rather than allow maturing government bonds to roll off its balance sheet naturally or sell U.S. government bonds outright.
The Andersen Institute for Finance and Economics cited the latest annual report issued by Japan’s Ministry of Finance in March 2026, which said securities maturing in one year or less accounted for 26.1% of Japan’s foreign-exchange reserves. Those reserves include securities and cash.
“There is evidence that Japan is consuming assets at the short end of the maturity structure to conduct this intervention,” said Rashad Ahmed, an economist at the Andersen Institute. “Even if they are currently relying primarily on reducing short-term securities, it is unclear how long that can continue. In my view, if Japan needs to support the yen for longer, it may need to begin selling longer-term securities.”