Damage Control in Tokyo: Government Clarifies PM Takaichi’s "Weak Yen" Remarks
In a swift effort to settle volatile currency markets, a Japanese government spokesperson clarified on Monday, February 2, 2026, that Prime Minister Sanae Takaichi was not advocating for a weaker currency during her recent campaign stops. The statement follows a weekend of market turbulence where the Japanese Yen (JPY) tumbled after the Prime Minister appeared to praise the benefits of depreciation.
At the GME Academy, we classify this as a "Classic Verbal Pivot." For Forex Trading, specifically the USD/JPY, the mismatch between a Prime Minister's rhetoric and a Finance Ministry’s actions creates a "Volatility Trap." When the head of government seems to welcome a weak currency while the central bank is trying to support it, the market usually sells the currency first and waits for clarification later.
1. The Weekend Slip: "A Great Opportunity."
The controversy began on Saturday, January 31, during an election rally in Kawasaki. With a snap general election scheduled for February 8, PM Takaichi told supporters that the yen’s current weakness was a "major opportunity" for Japanese exporters and the automobile industry.
What she said:
She noted that the weak yen serves as a "buffer" against U.S. tariffs.
She pointed out that the government’s foreign exchange special account was seeing massive gains due to the exchange rate.
She contrasted the current situation with the "strong yen" era of the former Democratic Party of Japan, which she claimed forced companies to move operations overseas.
The Market Reaction: The USD/JPY immediately spiked, breaking past the 155.00 level as traders interpreted her comments as a signal that the government would tolerate further yen weakness—effectively "cooling" expectations of a looming intervention.
2. The Monday Walkback: "Resilience, Not Depreciation".
By Monday morning, Deputy Chief Cabinet Secretary Masanao Ozaki was tasked with correcting the narrative. He stressed that Takaichi’s true intent was to highlight the need to build an economy "resilient to exchange-rate fluctuations" rather than endorsing a weaker yen.
Takaichi herself took to social media (X) to clarify: "I did not mean to emphasize the benefits of a weak yen. Rising prices of energy and food are a challenge, and the government needs to address the situation."
3. The Finance Ministry vs. The Prime Minister
The confusion in Tokyo is particularly dangerous because it contradicts Finance Minister Satsuki Katayama, who has spent the last month threatening "decisive action" (market intervention) to support the battered currency.
The Conflict: The Finance Ministry wants the yen to be stronger to curb the 2026 inflation spike.
The Takaichi Angle: As a staunch "Reflationist," Takaichi favors expansionary fiscal policies and domestic investment, which naturally tend to weaken the currency.
The Trump Factor: The recent nomination of Kevin Warsh as U.S. Fed Chair has already put upward pressure on the US Dollar, making any "weak yen" comments from Tokyo feel like throwing gasoline on a fire.
4. Forex Impact: Trading the "Takaichi Tightrope".
For Forex Trading for Beginners, this is a masterclass in Geopolitical Sentiment.
The "Intervention Floor": Despite the PM's remarks, the Finance Ministry's "Line in the Sand" at 155.00–156.00 remains the primary psychological level.
Election Volatility: Expect the USD/JPY and EUR/JPY to remain highly sensitive to campaign trail rhetoric until the February 8 election.
The "Safe Haven" Status: If the government appears disorganized, the Yen may lose its traditional "Safe Haven" status, leading to further capital flight toward the USD or Gold.
The GME Academy Analysis: "Watch the Election, Not the Words"
At Global Markets Eruditio, we believe the "clarification" was necessary to prevent a total yen collapse before the election. However, the underlying truth remains: Takaichi's administration is more comfortable with a weak yen than any of its predecessors. Traders should look for "Buy the Dip" opportunities on the Yen if intervention threats become too loud, but keep the long-term USD/JPY trend biased toward the upside.
Are You Trading the Japan Snap Election? Currency markets don't wait for the votes to be counted. When a Prime Minister "slips up," the pips move in seconds. Don't be the last to know.
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