Japanese Prime Minister Sanae Takaichi during the United Nations General Assembly (UNGA) on Tuesday, September 22, 2026 in New York, USA. The theme of the 81st session of the United Nations General Assembly is “Restoring trust, managing change: A United Nations that delivers results for all.” Photographer: Angelina Katsanis/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images
Japanese Prime Minister Sanae Takaichi rejected criticism that he is responsible for the weaker yen on the one hand and pushing up Japan’s interest rates on the other.
Takaichi said this in the Diet. According to Reuters, a Japanese translation of her remarks said, “I have been repeatedly criticized for “high market depreciation of the yen” and “high market interest rates,” but I unequivocally deny that.
He answered a question from opposition lawmaker Yoshifumi Hamano about the formulation of the country’s second supplementary budget.
Takaichi also said his administration would increase confidence in the yen by building a strong economy.
Under her administration, yields on Japanese government bonds rose to multi-decade highs while the yen fell to its lowest level since 1986, prompting Tokyo and even Washington to enter foreign exchange markets to support the yen.
According to reports, Takaichi said in January that a weaker yen would create opportunities for export industries and act as a buffer against U.S. tariffs, but he quickly clarified that he had no particular hopes for the direction of the weaker yen.
Japan’s exports have been partially boosted by the weaker yen, as a weaker currency makes exports more competitive.
Regarding the bond market, Takaichi said, “We want to appropriately control the amount of government bonds issued,” as yields are rising due to the Bank of Japan’s policy interest rate hike and the normalization of monetary policy.
Mr. Takaichi announced plans to cut food taxes earlier this year and announced a supplementary budget earlier this year, raising the possibility that Japan will need to increase bond issuance to maintain government spending.
According to Bloomberg, Takaichi said the total amount of government debt issuance for calendar year 2026 would remain unchanged from the original budget plan, but experts were skeptical.
“The bond market is different, but it’s not stupid. You can’t increase spending without increasing debt,” Jesper Coll, a specialist director at Monex Group, told CNBC in April, when the supplementary budget was announced.
