The yen extended its decline on Tuesday following reports that Japanese Prime Minister Sanae Takaichi expressed concerns about further interest rate hikes during a meeting with Bank of Japan Governor Kazuo Ueda last week. Local media indicated Takaichi voiced apprehension over additional rate increases, suggesting potential resistance to the BOJ's monetary policy trajectory.

This development comes as the yen has been under pressure amid diverging monetary policies between Japan and other major economies. The BOJ has maintained ultra-loose monetary policy longer than its global counterparts, contributing to the yen's weakness. Takaichi's reported stance could signal a shift in the government's approach to the central bank's decisions, particularly as inflation concerns persist in Japan.

The market reaction underscores the sensitivity of currency markets to political signals regarding monetary policy. Traders interpreted Takaichi's reported comments as potentially limiting the BOJ's room to maneuver on interest rates, leading to further yen selling. The exchange rate movement reflects broader uncertainty about Japan's economic policy direction under the new administration.