Group 1 - The Japanese yen is expected to remain the weakest major currency against the US dollar in 2025, even if the Bank of Japan is the only major central bank to raise interest rates [2] - The Bank of Japan is anticipated to raise its policy rate by 25 basis points to 0.75%, the highest level in 30 years, with further increases expected next year [2] - The Japanese economy is showing signs of recovery from a contraction caused by US tariffs, with corporate confidence at a four-year high and a tight labor market supporting wage growth and consumer spending [4] Group 2 - Japan's public debt is the highest globally, at approximately 250% of GDP, which poses challenges for the bond market [5] - Foreign ownership of Japanese government bonds has increased to 12.2%, more than double the level in 2010, indicating growing interest from overseas investors [5] - The Japanese bond market is currently the worst-performing major bond market globally, with 10-year bond yields at their highest since 2007 [5][7] Group 3 - The yen has been under pressure, with the exchange rate against the euro hitting historical lows and the dollar-yen rate approaching the intervention threshold of 160 [7] - The Japanese government has passed a significant supplementary budget of 18.3 trillion yen (approximately 118 billion USD), marking the largest stimulus plan since the pandemic [7]

Core Points - Japanese Prime Minister Sanae Takaichi emphasized the government's readiness to monitor exchange rate fluctuations and take necessary actions to ensure fiscal sustainability and defend the economic stimulus plan [1][4] - The market is closely watching whether the Japanese authorities will shift from verbal warnings to actual intervention, especially during the low liquidity period created by the U.S. Thanksgiving holiday [1][4] Group 1: Government Actions and Statements - The Japanese government is prepared to monitor the nature of exchange rate fluctuations, distinguishing between those driven by economic fundamentals and speculative behavior [1] - Takaichi defended the economic stimulus plan, stating it is not "reckless spending" and committed to reducing Japan's debt-to-GDP ratio [1] - The Prime Minister highlighted that ensuring Japan's fiscal sustainability is the most important priority [1] Group 2: Market Conditions and Potential Interventions - The upcoming U.S. Thanksgiving holiday and subsequent low trading volumes create an ideal environment for potential currency intervention by Japanese authorities [4] - Historical data indicates that Japan tends to intervene during such low liquidity periods to achieve significant price impacts with less capital [4] - The key challenge for Japanese authorities is to effectively curb excessive depreciation of the yen without depleting foreign exchange reserves [4]