Japanese Finance Minister Katsuyuki Katayama stated that Prime Minister Sanae Takaichi did not overly emphasize the benefits of yen depreciation last weekend. According to Jin10, this suggests that Katayama is attempting to maintain market awareness of potential government intervention risks. Katayama remarked, 'She merely provided a textbook response to the yen's exchange rate without particularly highlighting the advantages of a weaker yen.' He added that he agrees with Takaichi's stance that yen depreciation has both advantages and disadvantages.
As the House of Representatives election on February 8 approaches, traders are bracing for increased market volatility. They are betting that the Liberal Democratic Party, led by Takaichi, might secure a significant victory. Such an outcome could pave the way for more aggressive fiscal policies, potentially increasing inflation and putting pressure on the yen and Japanese government bonds.