Japanese Prime Minister Sanae Takaichi said on Sunday her government will take necessary steps against speculative market moves, in the wake of a yen spike that heightened traders’ alert over the chance of currency intervention.
Japanese government bonds and the yen have sold off in recent weeks on concern Takaichi’s expansionary fiscal policy and the slow pace of interest rate hikes by the Bank of Japan could lead to additional debt issuance and too-high inflation.
After sliding near the psychologically important line of 160 to the dollar, the yen jumped suddenly on Friday after the New York Federal Reserve conducted rate checks, a move some traders saw as heightening the chance of joint U.S.-Japan intervention to halt the ailing currency’s slide.
“I won’t comment on specific market moves,” Takaichi told a Fuji Television talk show, when asked about the bond selloff and the yen’s declines.
“The government will take necessary steps against speculative or very abnormal market moves,” she said without elaborating. A weak yen has become a source of headaches for Japanese policymakers as it pushes up import costs and broader inflation, hurting households’ purchasing power.
