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Japanese Prime Minister Sanae Takaichi said on Sunday her government will take necessary steps against speculative market moves, in the wake of a yen spike that heightened traders’ alert over the chance of currency intervention.

Japanese government bonds and the yen have sold off in recent weeks on concern Takaichi’s expansionary fiscal policy and the slow pace of interest rate hikes by the Bank of Japan could lead to additional debt issuance and too-high inflation.

After sliding near the psychologically important line of 160 to the dollar, the yen jumped suddenly on Friday after the New York Federal Reserve conducted rate checks, a move some traders saw as heightening the chance of joint U.S.-Japan intervention to halt the ailing currency’s slide.

“I won’t comment on specific market moves,” Takaichi told a Fuji Television talk show, when asked about the bond selloff and the yen’s declines.

“The government will take necessary steps against speculative or very abnormal market moves,” she said without elaborating. A weak yen has become a source of headaches for Japanese policymakers as it pushes up import costs and broader inflation, hurting households’ purchasing power.

Takaichi has compiled a big spending package to cushion the blow from rising living costs and vowed to suspend for two years the 8% sales tax on food, triggering a spike in bond yields that increases the cost of funding Japan’s huge public debt.

In the television programme, she said her government will aim to start the two-year tax suspension sometime during the fiscal year beginning in April.

Takaichi has been under pressure to deal with the bond market rout, which has accelerated with her decision to call a snap election on February 8 to seek a mandate to gear up her expansionary fiscal policies.

U.S. Treasury Secretary Scott Bessent signalled Washington’s displeasure over the repercussions from the rising Japanese yields, saying last week that it was “very hard to disaggregate the market reaction from what’s going on endogenously in Japan.”

“I’ve been in touch with my economic counterparts in Japan, and I am sure that they will begin saying the things that will calm the market down,” Bessent said at the World Economic Forum in Davos.

Since then, Takaichi has stressed that Japan can secure enough funds for the tax suspension without issuing debt.

BOJ Governor Kazuo Ueda on Friday signalled the central bank’s readiness to work closely with the government to contain sharp rises in yields, including by conducting emergency bond-buying operations.

The market moves are emerging as a key topic of debate in the election.

While most parties are calling for a cut to the consumption tax, several opposition parties have proposed investing the BOJ’s holdings of exchange-traded funds and government reserves set aside for currency intervention, and using the proceeds to fund a consumption tax cut.

The BOJ could speed up the selling of ETFs so that the proceeds can be used more quickly to fund government spending, Makoto Hamaguchi, a senior official of the opposition Democratic Party for the People, told a Sunday talk show on public broadcaster NHK.

Takaichi’s ruling coalition appears cautious of the idea.

“Using reserves set aside for currency intervention would require selling U.S. Treasuries,” Takayuki Kobayashi, a senior official of Takaichi’s Liberal Democratic Party (LDP), told the NHK programme. “That could affect markets and cause a lot of problems.”

Alex Saito, a senior official in the LDP’s coalition partner, the Japan Innovation Party, known as Ishin, pointed to problems that could emerge by tapping the BOJ’s ETF holdings to fund a tax cut.

“Tapping BOJ assets risks undermining the central bank’s independence, and would be a dangerous step that could further weaken the yen and push up long-term interest rates,” Saito told NHK.

In September, the BOJ decided on a plan to sell its huge ETF holdings, accumulated during its decade-long stimulus programme, at an annual pace of 330 billion yen ($2.1 billion).