Japanese Finance Minister Satsuki Katayama urged caution over using foreign exchange reserves to fund spending and tax cuts.
According to Reuters on the 8th, Katayama said during a television appearance that "given recent yen movements, utilizing foreign exchange reserves could be one option," but warned that "since it is an important tool, using it carelessly could create problems."
"The Prime Minister is well aware of this issue," Katayama said. "We must carefully monitor market conditions and determine what asset management approach is most advantageous for Japan, so we need to take a cautious and professional approach," she repeatedly emphasized. She added, "If necessary, we will communicate with the market in various ways on Monday."
According to Japan's Ministry of Finance, foreign exchange reserves stood at $1.3697 trillion as of end-2025. The reserves swelled during past interventions involving yen sales and dollar purchases, hovering around $1.3 trillion since approximately 2012.
The Liberal Democratic Party led by Prime Minister Sanae Takaichi swept Japan's House of Representatives election held on the 8th, securing 316 seats—surpassing both the 310-seat threshold required to propose constitutional amendments and the majority line. However, the party faces challenges in securing funding while simultaneously pursuing aggressive fiscal expansion and tax cuts.