Japan and Korea have dumped billions of dollars defending the yen and the won against the strong US currency

• Japan and Korea have dumped billions of dollars in FX markets to prop up their currencies against the dollar.
• Japan last week spent up to 2.8 trillion yen ($19.35 billion) to aid the yen in its first market intervention since 1998.

Japan and Korea have dumped billions of dollars into the foreign exchange market to prop up the value of their respective currencies against the US dollar, which has been steamrolling over most of its rivals this year.

Japan last week spent up to 2.8 trillion yen ($19.35 billion) to aid the yen, a notice from the Ministry of Finance on Friday showed. The record amount represented 15% of funds available for intervention efforts, Reuters reported. This week's market intervention marked the country's first since 1998.

South Korea sold $15.41 billion in the second quarter, the Bank of Korea said in its quarterly intervention notice. That was the largest amount since the central bank began disclosing figures in 2019, according to Bloomberg.

This year, the dollar has surged 26% against the yen and has risen 21% versus the won.

The Asian currencies, like other currencies from both developed and emerging market economies, have slumped against the dollar as the Federal Reserve's aggressive path of interest rate acts as a sturdy driver of strength for the greenback. The Fed this month issued its third straight rate hike of 75 basis points and its fifth rate hike of the year as it works to bring down inflation.

The yen and the won have also been hurt by trade deficit concerns in part as both economies are importers of oil, the price of which has ballooned this year following Russia's invasion of Ukraine seven months ago.

Japan's intervention knocked the dollar down from around 145 yen to the 141 handle but the greenback has nearly recovered its ground. The dollar was up 0.2% at 144.66 yen on Friday.

The greenback on Friday was up 0.4% against South Korea's currency, buying 1,436 won. It advanced by 11.5% during the three months ended June, the quarter for which the Bank of Korea released its notification on Friday.