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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] Japan’s yen weakened sharply on Wednesday, breaching the ¥157-per-dollar level for the first time in 10 months, as Prime Minister Sanae Takaiichi moves to roll out a large-scale fiscal stimulus package. Concerns over worsening public finances also drove government bond yields to their highest levels in nearly two decades.
According to the Nikkei on the 20th, the yield on Japan’s benchmark 10-year government bond briefly rose to 1.8%, the highest since June 2008. The 30-year yield climbed to a record 3.37%, while the 5-year yield reached 1.3%, also marking its highest level since 2008.
In Tokyo’s foreign exchange market, the yen weakened nearly 2 yen in a single day, trading around ¥157.4 per dollar as of 11:10 a.m.—the weakest level since January. The yen also depreciated against the euro.
The Takaiichi administration is set to unveil a ¥21.3 trillion economic package on the 21st, its first major stimulus plan under the banner of “responsible proactive fiscal policy.” The measures include a ¥20,000 cash payment per child aged 0–18.
To fund the package, the government will introduce a ¥17.7 trillion supplementary budget, the largest since the pandemic-era ¥31.6 trillion. The scale expanded significantly from earlier proposals during political negotiations.
Market analysts warn that the yen could soon test or exceed this year’s high of ¥158.84 per dollar, as expectations rise that the Bank of Japan may struggle to lift interest rates amid aggressive government spending.
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
