Japanese Prime Minister Sanae Takai said on Wednesday that Japan is prepared to intervene in the foreign exchange market if yen movements become “excessive or speculative.”
Speaking in parliament, Takai emphasized that the government is closely monitoring currency fluctuations to determine whether recent yen weakness reflects economic fundamentals or speculative trading. “If volatility threatens financial stability, Tokyo stands ready to act in the FX market,” she said.
Takai also defended her economic stimulus package against criticism of “reckless spending,” reiterating that fiscal sustainability remains her top priority. She added that maintaining investor confidence while supporting growth will be key to Japan’s long-term stability.
The prime minister noted that the government is also watching changes in Japanese government bond (JGB) yields, as rising borrowing costs could increase fiscal pressure and impact domestic liquidity.
Analysts said Takai’s remarks suggest that Japan could be preparing for another round of currency intervention to stem the yen’s decline. The currency has recently hovered near the psychologically important ¥160 per dollar level, heightening concerns that the widening policy gap between the Bank of Japan and other central banks may continue to drive weakness in the yen.