Japan's Ishiba: Cash handout is quickest and most effective way to help with high prices
Japanese Prime Minister Shigeru Ishiba said on Wednesday that the cash handout is the quickest and most effective way to help low-income households cope with high prices.
Key quotes
Cash handout is the quickest and most effective way to help low-income households cope with high prices.
G7 needs to show solidarity to deal with the world’s problems.
Told the G7 leaders’ summit we can never tolerate Iran’s nuclear weapon development.
Confirmed G7 cooperation against North Korea’s nuclear missile development and crypto hacking.
Agreed with US President Trump to continue ministerial-level tariff talks.
Will continue to work intensely to achieve a trade deal with the US.
Agreed with South Korean President Lee to closely work together on stable bilateral relations.
Agreed with South Korean President Lee to promote further cooperation on North Korea.
Will attend the NATO summit in the Netherlands next week.
Has not reached a tariff agreement as a package with us.
Some disagreements remain with us on tariff talks.
Seeking a trade deal that benefits both countries while defending Japan’s national interest.
Japan and the US were seeking breakthroughs in trade deals until the last minute.
Market reaction
At the time of writing, the USD/JPY pair is trading 0.01% lower on the day to trade at 145.23.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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