Japan PM vows to keep watching yen, inflation moves carefully
EWJ•Prime Minister Sanae Takaichi said Japan will carefully scrutinize exchange-rate and price developments and respond appropriately. She said fiscal policy would consider factors including interest rates and yen moves.
1. Careful policy monitoring
Takaichi made the remarks in parliament in response to a question about economic policy and the potential fallout from a weak yen. She said the government would guide fiscal policy while considering factors affecting the economy, including interest rates and currency moves.
2. Recent policy comments
On Thursday, Takaichi said Japan’s economy no longer needed reflationary policies because it was not experiencing deflation. She also said the government fully respected the Bank of Japan’s independence in setting monetary policy.
3. Market pressure
Takaichi, once an advocate of loose fiscal and monetary policy, is under pressure from markets to reverse course. Investors’ concerns over Japan’s worsening finances and rising inflation have pushed down the yen and bond prices.
