Japan will defend the yen by strengthening its economy rather than direct currency intervention, Prime Minister Sanae Takaichi told parliament on Friday. Her economic strategy focuses on boosting domestic investment and supply chain resilience as the currency faces renewed selling pressure from Middle East tensions.

Takaichi emphasized that her economic and fiscal policies are not designed to steer foreign-exchange rates directly. Instead, she believes enhancing Japan's international competitiveness through increased investment and reinforced supply chains will maintain confidence in the yen over time.

Despite record government intervention in currency markets, the yen has weakened again toward the 160 per dollar threshold that many view as a potential trigger for additional action. The currency's decline reflects ongoing pressure from the widening interest rate differential with the United States.

Finance Minister Satsuki Katayama reinforced the government's stance, confirming readiness to take appropriate forex market action while maintaining close communication with U.S. authorities. This coordinated approach suggests policymakers remain vigilant about defending key psychological levels.