- Will not comment on forex levels
- But will take appropriate action if needed
- Still examining source of revenues to fund consumption tax cut
- Have to be mindful of movements in forex, interest rates in considering revenues to fund consumption tax cut
- Will keep an eye out on speculative forex moves, ready to take necessary action
Earlier, she also commented that she will “ensure sustainability of Japan’s fiscal state by lowering the debt-to-GDP ratio”. That will be tough considering how expansive her fiscal policies are and that is already the main reason why the Japanese yen has been battered for months on end since October.
The Takaichi trade summarised:
As she now calls for a snap election, will it be a case of buy the rumour, sell the fact as outlined here?
It will be interesting to see if this really backfires on Takaichi. But if that were to happen, expect yen shorts to be covered in a massive manner.
For now though, traders remain confident that things will not change in terms of policy heading for Japan. USD/JPY is down 0.1% to 157.93 today and continues to keep around the 158.00 level after a brief dip to 157.42 earlier in the day amid some safety flows.
