Japan PM vows to keep watching yen, inflation moves carefully

Japanese Prime Minister Sanae Takaichi said on Friday the government will ​continue to scrutinise exchange-rate and price ‌developments carefully, and respond appropriately.

Takaichi remarked in parliament in response to a ​question from an opposition lawmaker on ​Japan’s economic policy and the potential fallout ⁠from a weak yen

She also said ​the administration will guide fiscal policy ​by looking at various factors that affect the economy, including interest rates and yen moves

The remarks follow ​those by Takaichi in parliament on ​Thursday that Japan’s economy no longer needed reflationary policies ‌because ⁠it was not experiencing deflation

Takaichi also told parliament on Thursday the government is fully respecting the Bank of Japan’s ​independence in ​setting monetary ⁠policy, suggesting it would not push back against further interest-rate ​hikes

Once an advocate of loose ​fiscal ⁠and monetary policy, Takaichi is under pressure from markets to reverse course, with investors’ ⁠concern ​over Japan’s worsening finances ​and rising inflation pushing down the yen and bond ​prices.