Japan PM vows to keep watching yen, inflation moves carefully

Japanese Prime Minister Sanae Takaichi pledged on Friday to maintain a careful watch on both the exchange rate and inflation, with a readiness to act accordingly. • In parliament, Takaichi answered a query from a rival lawmaker regarding Japan’s economic policy and the potential consequences of a weak yen. • She further stated that the administration would adjust fiscal policy, considering several elements influencing the economy, such as interest rates and variations in the yen. • Takaichi’s statements came after her remarks on Thursday where she declared that Japan’s economy no longer required expansionary policies, as deflation was not a concern. • She also assured parliament that the government respects the Bank of Japan’s autonomy in monetary policy decisions, implying no opposition to additional interest-rate increases. • Takaichi, who once supported easy fiscal and monetary measures, is facing market pressure to alter her stance due to worries about Japan’s deteriorating finances and rising inflation, which are causing the yen and bond prices to fall.