Yen Weakens After First Face-Off Between Japan PM, BOJ Gov

By Megumi Fujikawa

TOKYO--The first face-to-face meeting between Japan's prime minister and the head of its central bank has cooled expectations that an interest-rate hike is coming soon, sending the yen to a nine-month low.

Markets had been closely watching the interaction between Prime Minister Sanae Takaichi, a proponent of looser monetary policy, and Bank of Japan Gov. Kazuo Ueda, who has been steadfast in saying that the bank is ready to hike rates, but only when conditions are right.

Takaichi has been calling for close coordination on policy with the central bank since she took office last month.

"It is extremely important that appropriate monetary-policy management be conducted toward achieving both strong economic growth and stable price increases," Takaichi said Wednesday at a meeting of an economic council that Ueda is also a member of.

"We will continue to request that the Bank of Japan Governor provide regular reports to this Council on Economic and Fiscal Policy. The government and the BOJ will continue to work together to advance the national economy," she said.

The remarks were taken by some traders as a sign that any action by the BOJ will be pushed further back. The yen reached the 155 threshold against the dollar overnight--the first time it has touched that level since February.

The Japanese currency has been soft in recent weeks on speculation that Takaichi, who prefers expansive economic policies, may pressure the BOJ to postpone monetary tightening. So far, Takaichi has refrained from making public comments about the direction of BOJ policymaking.

The pair last stood at 154.65. Easing fears over the U.S. government shutdown also led the dollar to strengthen against the yen. Earlier, lawmakers in the U.S. voted to end the country's record-long government shutdown. The measure ending the shutdown now goes to President Trump's desk for his signature.

The BOJ has kept its policy rate on hold at 0.5% since January as it waits for more data on the impact of U.S. tariffs and domestic wage trends, but has maintained its position on seeking further rate hikes.

Recent central bank messaging suggests that more BOJ policy board members think the domestic conditions needed for another rate hike are gradually being met.

"It seems the biggest risk right now is the possibility that the Takaichi administration will pressure the BOJ to hold off on raising interest rates," said Mizuho Securities economist Yusuke Matsuo.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

(END) Dow Jones Newswires

November 12, 2025 21:31 ET (02:31 GMT)