Yen in Crisis: Takaichi's Election Gamble Sparks Fiscal Fears, Intervention Doubts
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Firstpost•29-01-2026, 20:29
Yen in Crisis: Takaichi's Election Gamble Sparks Fiscal Fears, Intervention Doubts
- •Japan's yen faces a crisis of confidence due to Prime Minister Sanae Takaichi's snap election campaign focusing on expanded stimulus measures.
- •Authorities are hinting at market intervention, but experts like Toshinobu Chiba doubt its long-term impact due to investor distrust in Japan's fiscal control.
- •Japan's government debt is 230% of GDP, the highest in the developed world, exacerbating fears of a fiscal blowout.
- •Takaichi's pledge to suspend the consumption tax on food, a 5 trillion yen revenue source, without a clear replacement plan, raises concerns.
- •Past interventions, like in 2024, showed limited success in reversing the yen's decline, highlighting the challenges of sustained currency support.
Why It Matters: Takaichi's election promises and Japan's high debt fuel yen's crisis, raising doubts about intervention effectiveness.
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