Takaichi's Approval Ratings Plummet Amid Market Woes

Japanese Prime Minister Sanae Takaichi's approval rating has hit its lowest point since she took office last year, amidst rising inflation and a weak yen. The prime minister's strong advocacy for fiscal stimulus and criticism of higher interest rates have sent bond yields higher, making it difficult for her officials to talk down the yen.

Takaichi's dovish approach has caused headaches in the currency market, with the yen sliding to a four-decade low. Although Finance Minister Satsuki Katayama has threatened 'decisive' action to boost the currency, her efforts have been unsuccessful so far.

The government is now pitching its expansionary fiscal policy as a way to boost Japan's growth potential and enhance the appeal of the yen and JGBs. However, markets remain unconvinced, with yields on track for further rises amid looming prospects of bigger debt issuance that would strain Japan's finances.