Japan Prime Minister Highlights Benefits of Weak Yen Amid Government Efforts to Curb Currency Decline
By Satoshi Sugiyama and Katya Golubkova — Tokyo, February 1, 2026
Japanese Prime Minister Sanae Takaichi has publicly spoken about the advantages of a weaker yen for Japan’s export-driven economy, even as her government signals readiness to intervene to stabilize the currency amid its recent sharp decline.
In a campaign speech delivered ahead of the upcoming snap election scheduled for February 8, Prime Minister Takaichi emphasized the boost a weaker yen provides to Japanese exporters. “People say the weak yen is bad right now, but for export industries, it’s a major opportunity,” she said. “Whether it’s selling food or automobiles, even though there were U.S. tariffs, the weaker yen has served as a buffer. That has helped us tremendously.”
The prime minister’s comments focused on the advantages for export sectors and reflected her broader economic vision. She also stressed the importance of building an economic framework resilient to currency fluctuations, highlighting the government’s intent to promote domestic investment as a means of cushioning the economy from exchange rate volatility.
Yen at 18-Month Low, Inflation Pressures Mount
The yen has been hovering near 18-month lows against the U.S. dollar, prompting concerns about the potential for imported inflation and increased financial strain on consumers. Inflationary pressures have raised the possibility that the Bank of Japan might need to adjust interest rates.
At the same time, Japan’s Finance Minister Satsuki Katayama has repeatedly underscored that the ministry will not hesitate to take necessary measures to support the yen in the event of excessive foreign exchange volatility. Market observers have widely interpreted these signals as indications of potential government intervention to curb the yen’s decline.
Following Prime Minister Takaichi’s initial remarks, she later clarified her position on the currency’s direction, emphasizing a more neutral stance. In a post on the social media platform X, she stated, “I did not say which is better or worse — a strong yen or a weak yen.” She further clarified that her intention was to underline the goal of creating an economy resilient to currency movements rather than to advocate specifically for a weaker yen.
Opposition Voices Concern Over Impact on Households
The yen’s depreciation has drawn criticism from opposition parties. Yoshihiko Noda, the former prime minister and finance minister who now co-leads the Centrist Reform Alliance—the largest opposition party—expressed concerns about the impact of a weak yen on ordinary Japanese households.
“As no one feels pleased looking at their household budget amid an excessive weakening of the yen,” Noda told the Nikkei newspaper, pointing out that the government’s approach lacks consideration of the perspective of everyday citizens. He warned that the ongoing currency slide could be detrimental for household finances.
Signs of Potential Market Intervention
The yen experienced a notable spike after reports emerged that the New York Federal Reserve had joined Japanese authorities in inquiring with banks about yen buying conditions. Such queries are often interpreted by market participants as a precursor to coordinated currency market intervention.
Japan’s government bond yields have concurrently surged to record highs, reflecting investor concerns about the country’s fiscal sustainability amid the currency weakness. These developments underline the broader financial market unease in Japan.
Election and Economic Reflation Goals
Prime Minister Takaichi is seeking a fresh mandate in the February 8 snap election to advance her agenda focused on reflating the Japanese economy. Her balanced approach—acknowledging the competitive advantage a weaker yen offers exporters while also highlighting the need to withstand currency fluctuations—reflects the complex challenges facing policymakers amid evolving global economic dynamics.
As the yen remains under pressure, both the government’s rhetoric and readiness to intervene will likely remain critical factors watched closely by financial markets worldwide.
Related Market Data:
- USD/JPY: Yen at 18-month lows
- Japanese government bond yields: Trading near record highs
- Major indices (as of Feb 1): Dow Jones -0.36%, S&P 500 -0.43%, Nasdaq -0.94%
- Commodity prices: Gold Futures down 11.39%, Crude Oil WTI near $65/barrel
This report is based on information available as of February 1, 2026, and may be updated as new developments arise.