Japan's Prime Minister Sanae Takaichi speaks to the media after a telephone call with U.S. President Donald Trump, at her official residence in Tokyo, Japan, November 25, 2025. REUTERS/Issei Kato

By Leika Kihara

TOKYO (Reuters) -Japan's government stands ready to take "necessary" action in the market with a close eye on whether exchange-rate moves reflect economic fundamentals or are driven by speculative action, Prime Minister Sanae Takaichi said on Wednesday.

"We will closely monitor market moves, including those of Japanese government bond (JGB) yields and exchange rates," Takaichi told parliament, when asked by an opposition lawmaker about recent yen declines.

Takaichi also said her administration's economic stimulus package was not "reckless spending" and that the government would strive to lower Japan's debt-to-gross domestic product ratio with a close eye on bond yield moves.

"What's most important for me is to ensure Japan's fiscal sustainability," she said.

(Reporting by Leika Kihara; Editing by Himani Sarkar and Tom Hogue)