TOKYO, Feb 1 — Japanese Prime Minister Sanae Takaichi has talked up the benefits of a weaker yen in a campaign speech, adopting a tone at odds with her Finance Ministry, which has refused to rule out any options to counter excessive foreign exchange volatility.
She later softened her stance, saying she had no preference for the yen's direction.
"People say the weak yen is bad right now, but for export industries, it is a major opportunity
"Whether it is selling food or automobiles, even though there were United States (US) tariffs, the weaker yen has served as a buffer. That has helped us tremendously," Takaichi said yesterday ahead of a snap election on February 8.
She also expressed a desire to build an economic structure resilient to currency fluctuation by boosting domestic investment.
The yen has hovered at 18 month lows against the US dollar, contributing to inflation that has raised the prospect of interest rate hikes by the central bank. Finance Minister Satsuki Katayama has repeatedly said her ministry will take action to support the currency when necessary, a statement widely interpreted by analysts and traders as market intervention.
In an X (formerly Twitter) post today, Takaichi said she did not favour a specific direction for the yen.
"I did not say which is better or worse — a strong yen or a weak yen," she said, adding that the government is monitoring financial markets and that, as Prime Minister, she will refrain from commenting on the matter.
"My intention was solely to state that we aim to build an economic structure that is resilient to exchange-rate fluctuation, and not, as some reports have suggested, to emphasise the benefits of a weak yen," Takaichi added.
Nikkei reported ex-premier cum finance minister Yoshihiko Noda as saying todat that a weak yen hurts households.
"No one feels pleased while looking at their household budget amid an excessive weakening of the yen. The perspective of ordinary people is missing, which has made me concerned once again," said the co-head of Japan's newly-formed and largest opposition party, the Centrist Reform Alliance.
The yen spiked after reports that the New York Federal Reserve had joined the Japanese authorities in asking banks about exchange rates for yen purchases — queries that market participants often interpret as a signal of readiness to intervene.
Its protracted decline and a recent surge in Japanese government bond yields to record highs reflect investor concern about Japan's strained finances.
Takaichi is seeking a mandate to reflate the economy.
