Matsuzawa Morning Report

Research evidence excerpt

Matsuzawa Morning Report

Global Markets Research

16 June 2026Matsuzawa Morning Report

Macro Strategy - Japan

Three reasons why JPY continues to weaken despite Research Analysts

reactionary decline in oil Strategy

Naka Matsuzawa - NSC

What actions could the BOJ and Ministry of Finance take? naka.matsuzawa@nomura.com

+81 3 6703 3864

-TheBOJmeetingisunlikelytomeetthemarket'shawkishexpectations,andwilllikely

causeJPYtoweakenandthebondmarket'syieldcurvetosteepen.

-JPYcontinuestoweakendespiteareactionarydeclineinoilpricesbecause:(1)the

Takaichiadministrationcontinuestotakeareflationarystance;(2)USyieldsarehigh;and

(3)USequitiesaredominant.

-ItwillbedifficultfortheBOJtorampupthepaceofratehikeswiththeaimofcurbing

JPY'sweaknessuntil(1)changes.

-TheTakaichiadministration'sreflationarystancemakesitdifficultfortheMOFtokeep

JPYataspecificlevel,anditmaywaitfor(2)and(3)towinddownbeforeintervening.

Today's Japanese market

In Japanese markets on Tuesday, this author expects limited upside for both equities and

bonds (in overnight futures trading, bonds were down 3 sen and equities were up JPY350

over OSE). In overseas markets yesterday, oil prices continued to fall in response to the

peace accord in the Middle East, bolstering the market's expectations for an economic

recovery. In the US stock market, tech and cyclical stocks were strong across the board.

In the US bond market, rate hike expectations were almost unchanged and super-longs

fell. Despite lower oil prices, US inflation expectations rose for a second straight day,

which likely reflects expectations for an economic recovery. In the FX market, both USD

and JPY were weak. JPY fell below 160 at one point against USD, but this did not last,

and JPY continued to fall against cross currencies.