Takaichi warns Japan is ready to act on speculative moves

Speculation has mounted that Japanese authorities may be preparing to enter foreign-exchange markets in a bid to halt the yen’s slide

Published Sun, Jan 25, 2026 · 10:05 AM

JAPANESE Prime Minister Sanae Takaichi sent a fresh warning to financial markets amid a weakening yen and surging bond yields, saying the government will be ready to take action.

“It is not for me as a prime minister to comment on matters that should be determined by the market, but we will take all necessary measures to address speculative and highly abnormal movements,” she said during a television debate among party leaders on Sunday (Jan 25).

Takaichi didn’t specify if her comments were related to Japanese government bond yields or the yen. Government officials have recently made several warning comments regarding both markets.

Speculation has mounted that Japanese authorities may be preparing to enter foreign-exchange markets in a bid to halt the yen’s slide, possibly with the rare assistance of the US. The yen swung sharply on Friday, reversing declines after Bank of Japan governor Kazuo Ueda ended his post-policy-decision press conference.

Gains in the yen accelerated in the US trading day, with an advance of as much as 1.75 per cent to 155.63 against the US dollar in the biggest one-day surge since August.

Japan is gearing up for a snap election on Feb 8, with Takaichi’s promise to cut taxes on food sending shockwaves through the Japanese debt market in the past week. Yields on bonds with the longest maturities surged to records earlier in the week before retreating. BLOOMBERG

Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.