Yen Slips Again, Japan's Giant Budget in the Spotlight
The Japanese yen weakened to around 156 per US dollar in Tuesday's (December 30th) trading, which was quiet due to a holiday. This weakening reversed the previous session's gains, as investors monitored the direction of Japan's fiscal policy. The government recently approved Prime Minister Sanae Takaichi's 122.3 trillion yen budget, the largest in history, aimed at boosting the economy while curbing new bond issuance.
However, Japan's fiscal condition remains a major market concern. Japan's public debt has now exceeded double the size of its economy, further limiting the government's room for substantial stimulus. These concerns have made investors cautious and put additional pressure on the yen amidst thin market liquidity.
On the other hand, the yen's weakening was somewhat tempered by signals of possible intervention from Japanese authorities. Finance Minister Katayama emphasized that Japan has the freedom to act if currency movements are deemed excessive. Meanwhile, the market is also awaiting the direction of monetary policy, with the next interest rate hike expected in July, although a quicker move could occur if the yen continues to weaken. (az)
Source: Newsmaker.id
