Sanae Takaichi responds to yen fluctuations, government clarifies intervention stance

Japanese Prime Minister Sanae Takaichi recently made a public response regarding the fluctuations in the yen exchange rate and government bond issues, outlining the government’s stance on Fuji Television’s program. The sharp volatility in the yen market has attracted widespread attention, and Takaichi’s policy orientation has become a key focus for market participants.

Government Clarifies Position, Refuses to Comment on Market Details

Takaichi emphasized in an interview that the government will not respond to specific market fluctuations on a case-by-case basis. She pointed out that the core measures of the government will involve necessary interventions against speculative or abnormal market behaviors, indicating the government’s emphasis on market order. Although no specific actions were disclosed, this statement signals that the government is willing to act when necessary.

Fiscal Expansion Policies and Central Bank Attitudes Raise Market Concerns

Investors are concerned about Takaichi’s policy orientation. The market generally believes that her expansionary fiscal policies, combined with the Bank of Japan’s relatively slow pace of interest rate hikes, could lead to increased government debt and rising inflationary pressures. Under the combined influence of these factors, the yen faces ongoing depreciation pressure. The USD/JPY exchange rate fell below the psychological level of 160, further intensifying market anxiety.

Central Bank Inspection Triggers Joint Intervention Expectations, Yen Reverses Rapidly

A turning point occurred after the Federal Reserve Bank of New York conducted a currency inspection. This move immediately sparked market speculation, with traders believing that the likelihood of coordinated intervention between the US and Japanese central banks has increased. Subsequently, the yen exchange rate rebounded quickly, and market sentiment shifted noticeably. This reaction clearly demonstrates that the market is highly sensitive to policy intervention signals, and policy expectations can often reverse exchange rate trends within a short period.