Japanese Prime Minister Sanae Takaichi has firmly rejected accusations that her policies are weakening the yen and driving up interest rates. Speaking in Parliament on October 19, 2026, she dismissed claims that she is responsible for the currency's decline and rising borrowing costs. Takaichi emphasized her administration's focus on rebuilding confidence in the yen through economic growth and fiscal discipline, including controlled issuance of Japanese government bonds in the next fiscal year's budget.
The Prime Minister's remarks come amid ongoing market concerns about Japan's fiscal management. Earlier in 2026, drafts of an economic policy blueprint raised fears of a shift toward expansionary policies, which contributed to the yen's depreciation against the dollar and higher long-term bond yields. However, Growth Strategy Minister Minoru Kiuchi stated in September that Japan no longer needs aggressive monetary easing or fiscal spending.
Market participants are closely watching how the government will fund planned initiatives, including a sales tax cut on food and increased defense spending, without exacerbating Japan's debt burden. Meanwhile, Bank of Japan Governor Kazuo Ueda noted that underlying inflation is nearing the central bank's 2% target. He also warned that long-term bond yields could rise if the market perceives the BOJ's interest rate adjustments as insufficient.