The Japanese yen weakened sharply on Thursday, sliding to its lowest level in ten months against the United States dollar, as markets reacted to expectations of a massive new economic stimulus package under Prime Minister Sanae Takaichi.
At 7:20 am CET, the dollar rose 0.42% against the yen to trade at ¥157.6215, marking its strongest level since January 15.
The renewed pressure on the Japanese currency comes amid reports that Takaichi is preparing a stimulus package exceeding ¥20 trillion, potentially Japan’s largest since the COVID-19 pandemic. While the move is aimed at boosting economic momentum, global investors are increasingly concerned about Japan’s fiscal direction and the likelihood of significant new borrowing to finance the plan.
Market analysts note that fears of fiscal expansion, combined with Japan’s persistently loose monetary conditions compared to the US, have contributed to the yen’s continued depreciation.
