Tokyo – Japan’s Finance Minister, Katsunobu Kato, emphasized on Tuesday that the government remains highly alert to fluctuations in foreign exchange rates, particularly those influenced by speculative trading.

“We are committed to closely monitoring exchange rate movements, especially those driven by speculative actions, with heightened vigilance,” Kato stated at a regular press briefing.

The yen has recently hit a three-month low, partly due to uncertainty after Japan’s ruling party lost its parliamentary majority. This shift has fueled concerns that political instability might delay the Bank of Japan’s efforts to gradually reduce its long-standing monetary stimulus.

In a separate statement on Tuesday, Japan’s Economy Minister, Ryosei Akazawa, expressed concern that a weaker yen could impact the economy in multiple ways. He noted, “A depreciating yen raises import costs, which can drive up prices. Without corresponding wage growth, this could reduce real household income, dampen consumer confidence, and lower private spending.”

The election outcomes have also increased speculation that any new government might seek alliances with smaller opposition groups and potentially increase spending to gain public backing.

Kato confirmed these plans, saying, “We intend to create a significant economic package and supplementary budget by integrating policies that extend beyond party lines.”