Japanese Prime Minister Sanae Takaichi sent a fresh warning to financial markets amid a weakening yen and surging bond yields, saying the government will be ready to take action.
“It is not for me as a prime minister to comment on matters that should be determined by the market, but we will take all necessary measures to address speculative and highly abnormal movements,” she said during a television debate among party leaders on Sunday.
Takaichi didn’t specify if her comments were related to Japanese government bond yields or the yen. Government officials have recently made several warning comments regarding both markets.
Speculation has mounted that Japanese authorities may be preparing to enter foreign-exchange markets in a bid to halt the yen’s slide, possibly with the rare assistance of the US. The yen swung sharply on Friday, reversing declines after Bank of Japan Governor Kazuo Ueda ended his post-policy decision press conference.
Gains in the yen accelerated in the US trading day, with an advance of as much as 1.75% to 155.63 against the dollar in the biggest one-day surge since August.
Japan is gearing up a for a snap election on Feb. 8, with Takaichi’s promise to cut taxes on food sending shockwaves through the Japanese debt market in the past week. Yields on bonds with the longest maturities surged to records earlier in the week before retreating.
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