Japanese Prime Minister Takaichi denies responsibility for weak yen and rising bond yields
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Prime Minister Sanae Takaichi pushed back against claims that her economic policies caused the yen's depreciation and higher bond yields, stressing that her government will strengthen confidence in the currency and carefully manage bond issuance.
Japan's Prime Minister Sanae Takaichi told parliament she rejects claims that her policies have caused a weak yen and higher interest rates, insisting instead that her government is acting responsibly in a difficult global environment.
"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, emphasizing growth and stability rather than panic. 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, highlighting a pragmatic approach to trade and competitiveness. 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, while her administration seeks to balance support for households with fiscal discipline. 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."