Matsuzawa Morning Report

Research evidence excerpt

Matsuzawa Morning Report

Global Markets Research

15 June 2026Matsuzawa Morning Report

Macro Strategy - Japan

Research Analysts

Road to the end of the credit cycle (2) Strategy

Naka Matsuzawa - NSC

Scope for further increases in US policy rates and long-term yields naka.matsuzawa@nomura.com

+81 3 6703 3864

-Despitelowercrudeoilpricesonexpectationsforapeaceagreement,USlong-term

yieldshavebeenslowtodecline,asthemarketthemeshiftsfromtheMiddleEast

situationtoexpectationsforeconomicrecovery.

-Theheavyskewtowardtechstocksisbeingreassessed,withinvestorinterestshifting

towardcyclicalstockssuchasbanks.

-TheBOJwilllikelybeginraisingrateslaterthantheUSandEurope,andmaynotbe

abletoraiseratestolevelsovertheneutrallevelbeforetheAIboomends.

-EvenifBOJratehikeslag,marketexpectationsfortheterminalrateandneutralratewill

likelyrisefirst,inlinewiththeUSandEurope,andasaresult,10yrJGByieldscouldnear

3.5%.

Today's Japanese market

In Japanese markets on Monday, this author expects both equities and bonds to continue

rising (in overnight futures trading, bonds and equities were up 22 sen and JPY1,320,

respectively, over OSE). In overseas markets yesterday, expectations for a Middle East

peace deal remained in play, with crude oil lower and momentum risk-on. However,

overall the market appears less to be driven by excess liquidity than to be pricing in

expectations for an economic recovery. US bonds fell as US equities strengthened, and

USD stopped weakening. In the US stock market, cyclicals and small/mid-caps were

strong, but the tech sector was mixed, with little momentum. In the US bond market, rate

hike expectations rose and the market priced in 21bp in rate hikes for this year. In the FX

market, JPY was soft and fell to the 160.0-160.5 range against USD. JPY was also down