Japan PM vows action against speculative trading after sudden yen spike

Japanese Prime Minister Sanae Takaichi said on Sunday the government will take necessary steps against speculative market moves, in the wake of the yen's spike that heightened traders' alert over the chance of currency intervention.

 

Japanese government bonds and the yen have faced a sell-off recently on concern Takaichi's expansionary fiscal policy and the slow pace of interest rate hikes by the Bank of Japan could lead to additional debt issuance and too-high inflation.

 

After sliding near the psychologically important 160 to the dollar, the yen jumped suddenly on Friday after the New York Federal Reserve conducted rate checks , a move some traders saw as heightening the chance of joint U.S.-Japan intervention to halt the ailing currency's slide.

 

 

"I won't comment on specific market moves," Takaichi told a television programme aired by Fuji Television, when asked about the recent bond sell-off and the yen's declines.

 

"The government will take necessary steps against speculative or very abnormal market moves," she said without elaborating.

 

A weak yen has become a source of headaches for Japanese policymakers as it pushes up import costs and broader inflation, hurting households' purchasing power.

 

Takaichi has compiled a big spending package to cushion the blow from rising living costs and vowed to suspend by two years an 8% levy on food sales, triggering a spike in bond yields that increases the cost of funding Japan's huge public debt.  (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)