The Japanese yen stabilized around 156.6 per dollar on Friday after two consecutive sessions of losses, though it remained near ten-month lows, intensifying calls for intervention. Tokyo’s verbal warnings last month briefly kept the yen out of the intervention zone, with Finance Minister Katayama emphasizing Japan’s freedom to act against excessive moves, though worries over further weakening persist. Japan’s business lobby leaders have now urged the government to address the weakening yen and support a stronger currency. The country’s expansive fiscal policy remained a source of concern, with public debt already exceeding twice the size of the country’s economy. The cabinet recently approved Prime Minister Takaichi’s record 122.3 trillion yen budget, seeking to balance aggressive spending with debt management by curbing new bond issuance. The yen ended 2025 with a modest 0.3% gain, snapping a four-year losing streak, partly supported by two rate hikes this year.
