Japan’s Prime Minister Rejects Blame for Weak Yen and Higher Interest Rates

Japanese Prime Minister Sanae Takaichi rejected criticism linking her administration’s policies to the weakening yen and rising interest rates, stressing that her government aims to strengthen confidence in the currency by building a robust economy.

Speaking before parliament on Monday, October 19, Takaichi denied responsibility for the currency’s decline and higher interest rates, responding to repeated criticism associating these developments with her tenure.

Her remarks came as Japanese government bond yields reached their highest levels in several decades and the yen fell to its weakest level since 1986, prompting Tokyo and Washington to intervene in the foreign exchange market to support the Japanese currency.

In remarks reported in January, Takaichi described the weak yen as an opportunity for export industries and a cushion against US tariffs. She later clarified that she did not favor any particular direction for the exchange rate.

A weaker yen helps make Japanese exports more competitive by lowering their prices in foreign currencies, although it also raises import costs.

Regarding the bond market, Takaichi said the government plans to adjust the volume of government bond issuance according to conditions, as yields rise and the Bank of Japan continues to normalize monetary policy and raise interest rates.