The Japanese yen was little changed around 157.9 per dollar on Tuesday, trading in a narrow range as Prime Minister Sanae Takaichi pressed ahead with expansionary fiscal measures despite concerns about yen weakness and government financing. In a parliamentary address, Takaichi vowed to cut the consumption tax on food products while emphasizing that the government would secure the necessary funding without issuing additional bonds, in an effort to reassure financial markets.
At the same time, investors were awaiting a slate of key economic releases due this week, including August data on wages, the current account, and household spending, as well as September readings on consumer confidence and machine tool orders.
Last week, a summary of opinions from the Bank of Japan’s September meeting indicated mounting concern that inflation could exceed the central bank’s 2% target, heightening the likelihood of another interest rate hike later this year but offering little guidance on its timing ahead of policy meetings in October and December.
