Japanese Prime Minister Takaichi denies responsibility for weak yen and rising bond yields
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Prime Minister Sanae Takaichi dismissed criticism tying her policies to the yen's slide and surging Japanese government bond yields, while insisting her government can rebuild confidence in the currency and tightly manage new borrowing.
Japan's Prime Minister Sanae Takaichi told parliament she rejects claims that her policies have driven a weak yen and higher interest rates, even as households and markets absorb the consequences of an economy under growing strain.
"I have been repeatedly criticized for 'Takaichi's weak yen' and 'Takaichi's high interest rates,' but I clearly deny that," she said, according to a Reuters translation of her remarks in Japanese. The comments came in response to a question from opposition lawmaker Yoshifumi Hamano about the preparation of a second supplementary budget. Takaichi said her administration will work to restore confidence in the yen by building a stronger economy, though critics argue that confidence cannot be rebuilt through rhetoric alone. Under her leadership, yields on Japanese government bonds have risen to multi-decade highs and the yen has fallen to its lowest level since 1986, prompting intervention from Tokyo and Washington in the foreign-exchange market. In January, Takaichi described a weak yen as potentially beneficial for exporters and as a buffer against U.S. tariffs, but later clarified she holds no specific preference for the currency's direction, underscoring the contradictions in her messaging. Regarding bond markets, Takaichi said the government intends to "appropriately control the amount of government bond issuance" as the Bank of Japan raises its policy rate and continues monetary normalization. Earlier this year she announced a cut to the food tax and unveiled a supplementary budget, raising questions about future bond issuance to fund spending and whether ordinary taxpayers will be left to pay the bill. Bloomberg reported that the total bond issuance planned for 2026 would remain unchanged from the original budget, a view met with skepticism from analysts. Jesper Koll, expert director at Monex Group, told CNBC in April that "Bond markets are a lot of things, but they're not stupid. You cannot increase spending without increasing debt."