Takaichi's Yen Policy Falls Short as Currency Continues Slide

Japan's Prime Minister Sanae Takaichi has been trying to downplay the yen's slide, but experts say her efforts are a temporary fix and will not address the root cause of the problem.

Takaichi met with US President Donald Trump in September, and he mentioned that US trade is tough due to the yen's depreciation. However, instead of taking decisive action to strengthen the yen, Takaichi responded by saying that 'as a general matter, the yen's undervaluation is a problem.'

The yen fell to nearly 160 to the dollar at one stage, and the government likely grew more wary due to its threat to accelerate inflation in Japan. However, verbal intervention, in which remarks by senior government officials are used to curb market swings, has been shown to be no more than a stopgap measure.

Takaichi's approach raises questions about her commitment to addressing the yen's slide. She previously welcomed a weak yen as 'a major opportunity for export industries', but now she claims that it is a problem.