Japan’s economy is facing fresh uncertainty as Prime Minister Sanae Takaichi’s recent remarks on Taiwan ripple through markets. With households already feeling the pinch, the provocative comments have added a new layer of political risk at a time when stability is crucial.
On November 21, Finance Minister Satsuki Katayama issued what Bloomberg called the "strongest warning yet" about the yen’s rapid slide against the U.S. dollar. This one-way dip is pushing up import costs, squeezing small businesses and denting purchasing power nationwide. 🏦💸
Tokyo has signaled readiness to step in under the existing U.S.-Japan agreement if volatility worsens. But analysts caution that outside factors could pile on more pressure. According to Reuters, a senior strategist at Sumitomo Mitsui Banking Corporation warns any new restrictions from the Chinese mainland—whether on travel or exports—could deepen the strain and speed up the yen’s decline.
Bank of Japan Governor Kazuo Ueda also raised alarms, pointing out that the weaker yen is feeding into higher import prices and slowly nudging up domestic inflation. "Exchange rate swings are starting to show up on store shelves," he noted, urging vigilance as the nation navigates this choppy economic tide.
For a country still managing rising living costs and global uncertainties, the combination of political missteps and currency turmoil underscores just how fragile Japan’s recovery remains this year. 🇯🇵✨
Reference(s):
How Japan's economy is paying price for Takaichi's political missteps
cgtn.com
