How many objects are created ?
// "xyz" is interned , JVM will create this object and keep it in String pool
String x = "xyz";
// a new String object is created here , x still refers to "xyz" 
x.toUpperCase(); 
// since char literal `Y` is not present in String referenced by x ,
// it returns the same instance referenced by x 
String y = x.replace('Y', 'y'); 
//  "abc" was interned and y+"abc" is a new object
y = y + "abc";  
System.out.println(y);
This statement returns a reference to  the same String object x:
String y = x.replace('Y', 'y'); 
Look at the documentation:
If the character oldChar does not occur in the character sequence represented by this String object, then a reference to this String object is returned. Otherwise, a new String object is created that represents a character sequence identical to the character sequence represented by this String object, except that every occurrence of oldChar is replaced by an occurrence of newChar.
solved String class replace() method [closed]