According to a senior lawmaker interviewed by Reuters, the yen's actual value should be around 120-130 per dollar rather than the current level of 150. This assessment is based on Japan's strong economic fundamentals. The ruling party in Japan is considering measures to address the issue of capital outflows.

The decline of the yen below 150 to the dollar was influenced by positive U.S. data, optimism regarding U.S. trade policies, and expectations of a slow monetary tightening by the Bank of Japan. A weak yen causes concerns for Japanese policymakers as it increases inflation by raising import costs, which could dampen consumption.

The lawmaker pointed out that both Japan and the U.S. do not desire an overly weak yen against the dollar. However, she mentioned that the impact of monetary policies on currency movements is limited in the long term. Therefore, more fundamental measures are needed to address the issue.

To combat the outflow of household funds overseas and support the yen, the ruling party is considering expanding a tax-free investment program to encourage individual investors to invest in domestic stocks. This expansion would aim to exempt elderly investors' long-term holdings of domestic stocks from inheritance tax when passed on to younger generations.

Despite the significant growth of the Nippon Individual Savings Account (NISA) program, which exempts retail investors from paying capital gains taxes on stock holdings, the popularity of high-yielding overseas stocks has contributed to the persistent weakness of the yen. The ruling party intends to introduce these measures in the government's annual policy guidelines for budget planning, anticipated to be released in June.