FX.co ★ Yen Weakens on BOJ Uncertainty

The Japanese yen hovered around 156 per dollar on Wednesday, stabilizing after a sharp drop in the previous session. That decline followed reports that Prime Minister Sanae Takaichi had voiced concern about further interest rate hikes during a meeting last week with Bank of Japan Governor Kazuo Ueda. After their talks, Ueda stated that Takaichi had made no specific requests while they discussed the state of the economy.

Takaichi is widely regarded as a pro-stimulus policymaker, favoring both expansionary fiscal measures and looser monetary conditions. Her stance is adding uncertainty to the outlook for further BOJ rate increases, at a time when markets are speculating that the central bank may resume its normalization of monetary policy later this year.

Separately, earlier reports indicated that US authorities conducted proactive rate checks last month to support the yen and signaled their readiness to coordinate foreign-exchange intervention at Japan’s request. The initiative, led by Scott Bessent, reflected concerns that political uncertainty ahead of Japan’s upcoming general election could unsettle financial markets.