Sanae Takaichi, Prime Minister of Japan, during the United Nations General Assembly (UNGA) in New York, United States, Tuesday, September 22, 2026. The theme of the 81st session of the United Nations General Assembly is “Restoring Trust, Managing Transformation: A UN that Meets the Needs of All.” Photographer: Angelina Katsanis/Bloomberg via Getty Images
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Japanese Prime Minister Sanae Takaichi has rejected criticism that she is partly responsible for the weak yen and partly for rising interest rates in the country.
Speaking in parliament, Takaichi said: “I have been repeatedly criticized for Takaichi’s weak yen and Takaichi’s high interest rates, but I clearly deny it,” according to a Reuters translation of his remarks in Japanese.
She was responding to a question from opposition party lawmaker Yoshifumi Hamano, who was interested in the development of a second supplementary budget for the country.
Takaichi also said his administration would boost confidence in the yen by building a strong economy.
Under his administration, yields on Japanese government bonds rose to multi-decade highs, while the yen weakened to its lowest level since 1986, prompting Tokyo and even Washington to intervene in the foreign exchange market to prop up the currency.
In January, Takaichi reportedly said a weak yen represented an opportunity for export industries and served as a buffer against U.S. tariffs, although she quickly clarified that she had no particular preference for the direction of the currency.
Japan’s exports have been partly boosted by the depreciation of the yen, as the weak currency makes exports more competitive.
Regarding bond markets, Takaichi said, “We intend to appropriately control the amount of government bond issuance,” at a time when yields are rising as Japan’s central bank raises its policy rate and continues to normalize monetary policy.
Earlier this year, Takaichi announced a plan to reduce the country’s food tax and unveiled a supplementary budget earlier this year, raising the possibility that Japan would have to issue more bonds to support its public spending.
Takaichi said total bond issuance for calendar year 2026 would remain unchanged from the original budget plan, according to Bloomberg, although experts were skeptical.
Jesper Koll, expert director of the Monex Group, told CNBC last April – when the supplementary budget was announced – that “the bond markets are a lot of things, but they are not stupid. You can’t increase spending without increasing debt.”
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