The head of foreign exchange research at the Mitsubishi UFJ pointed out that if the Japanese authorities try to support the yen through foreign exchange intervention, the effectiveness will largely depend on whether the government can simultaneously and properly manage fiscal policy risks. The market's current core focus is on the 2026 fiscal year budget to be passed by the Japanese government this Friday. Investors are concerned that the budget may include more than normal departmental spending. Analysts warned that if the budget does include unconventional expenses, it may trigger a drop in the price of Japanese treasury bonds, and as a result, further increase the depreciation pressure on the yen. In this situation, Japan's Ministry of Finance may be forced to enter the market to intervene to support the yen, but there is considerable uncertainty about whether such intervention will succeed.

The head of foreign exchange research at the Mitsubishi UFJ pointed out that if the Japanese authorities try to support the yen through foreign exchange intervention, the effectiveness will largely depend on whether the government can simultaneously and properly manage fiscal policy risks. The market's current core focus is on the 2026 fiscal year budget to be passed by the Japanese government this Friday. Investors are concerned that the budget may include more than normal departmental spending. Analysts warned that if the budget does include unconventional expenses, it may trigger a drop in the price of Japanese treasury bonds, and as a result, further increase the depreciation pressure on the yen. In this situation, Japan's Ministry of Finance may be forced to enter the market to intervene to support the yen, but there is considerable uncertainty about whether such intervention will succeed.