Japanese Prime Minister Sanae Takaichi has stated that Japan aims to uphold the credibility of the yen by reinforcing its economy, amidst ongoing Middle East tensions and renewed selling pressure on the currency.
Addressing parliament on Friday, Takaichi clarified, "The economic and fiscal management I am implementing is not intended to guide foreign exchange rates."
She explained that her policies are focused on boosting domestic investment, strengthening Japan's supply chains, and enhancing the nation's growth potential.
The Prime Minister added, "I believe that improving the international competitiveness of Japan's economy through these measures will help maintain confidence in the yen."
Despite recent record-breaking foreign exchange intervention, the yen has weakened against the U.S. dollar once more, approaching the 160 level, a threshold seen as a potential trigger for further government action.
Finance Minister Tsuyoshi Katayama reiterated on Friday that the government is prepared to take appropriate action in the foreign exchange market if necessary, emphasizing that she is maintaining close communication with relevant U.S. authorities.
With officials growing increasingly concerned that a weak yen will raise the cost of imported goods like food and energy, Japan spent over $73 billion to support the currency between April 28 and May 27, marking its first intervention since 2024.
All these developments have fueled expectations that the Bank of Japan is poised to raise interest rates.
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