Japan PM Sanae Takaichi Defends Economic Strategy as Approval Ratings Fall
Japanese Prime Minister Sanae Takaichi has defended her government's economic policies, arguing that efforts to strengthen Japan's long-term growth potential will reinforce confidence in the Japanese yen, even as rising living costs and a weaker currency weigh on public approval.
Her remarks come as recent opinion polls show declining support for the administration amid concerns over inflation, household expenses, and uncertainty surrounding fiscal policy.
Takaichi Says Strong Growth Will Support the Yen
Speaking in parliament on Monday, Takaichi said exchange rates are influenced by multiple market factors and cannot be attributed to a single government policy.
She argued that improving Japan's economic growth potential and global competitiveness would strengthen investor confidence in the yen over the long term.
The prime minister also emphasized that while the Bank of Japan (BOJ) independently manages monetary policy, it is required to coordinate closely with the government on broader economic objectives.
Weak Yen and Rising Living Costs Remain Key Issues
The Japanese yen has recently traded near its weakest level in decades, increasing the cost of imported goods and adding pressure on households already facing higher living expenses.
Critics have questioned whether the government's economic stance and cautious approach toward monetary tightening have contributed to the currency's prolonged weakness.
Public dissatisfaction has largely centered on rising prices for food and everyday necessities.
Approval Ratings Decline
Recent opinion polls indicate that Takaichi's approval rating has fallen to its lowest level since taking office.
Surveys suggest that concerns over the cost of living remain the primary reason behind declining public support, while disapproval of the government's inflation response has increased significantly.
Despite the decline, analysts note that the administration continues to maintain stronger approval ratings than several previous Japanese governments.
Fiscal Challenges Continue
The government has yet to finalize details of a proposed two-year suspension of Japan's 8% food sales tax, a measure intended to reduce pressure on consumers.
Lawmakers remain divided over how such a tax reduction would be financed, particularly as Japan continues increasing defense spending and managing one of the world's highest public debt levels.
Takaichi said her administration remains committed to balancing economic growth with fiscal responsibility through transparent communication with financial markets.
BOJ Expected to Maintain Rates
The Bank of Japan, which raised interest rates to their highest level in decades earlier this year, is widely expected to keep rates unchanged at its upcoming policy meeting.
However, economists believe the central bank may leave the door open for additional rate increases if inflationary pressures continue, supported by a weak yen, higher energy prices, and strong global demand related to artificial intelligence investments.
As markets monitor both government policy and the BOJ's next move, investors will be watching whether Japan can stabilize inflation while supporting long-term economic growth.
