FX Insights: Foreign Exchange - Global

Research evidence excerpt

FX Insights: Foreign Exchange - Global

Global Markets Research

FX Insights 16 June 2026

Foreign Exchange - Global

Policy rate hike to 1.00% with a dovish dissenting Research Analysts

vote Global FX Strategy

Yujiro Goto - NSC

The market’s behind-the-curve risk expectations weigh on long-term yujiro.goto@nomura.com

JGBs and JPY, but a marked sell-off seems unlikely +81 3 6703 1120

Yusuke Miyairi, CFA - NIplc

• The BOJ raised its policy rate by 25bp to the highest level since 1995, with a 7-1 vote

yusuke.miyairi@nomura.com

(Takaichi’s dovish appointee was the dissenting vote). The Bank maintains a +44 (0) 20 7102 4145

continued rate hiking stance, but with no clear hints from Uchida about the future rate

Tomoki Hideshima - NSC

path.

tomoki.hideshima@nomura.com

• The BOJ decided to halt its JGB tapering and maintain purchases at about JPY2trn +81 3 6703 1427

per month from April 2027 onwards, but even at this pace, the BOJ's JGB holdings will Yuki Kodera - NSC

continue to decline steadily, as maturing bonds will still outpace new purchases. yuki.kodera@nomura.com

+81 3 6703 1281

• The divergence between how the BOJ and the market think about behind-the-curve

risk exists, and this will likely make long-term JGBs and JPY vulnerable. However,

locals appear to have a dip-buying stance on long-term JGBs and remain wary of the

risk of MOF intervention.

• Following the BOJ's June MPM, two forthcoming fiscal policy events will be more

important for the market: 1) an interim report from the national conference on lowering

the consumption tax on food items (in June); followed by 2) the release of the Basic

Policy on Economic and Fiscal Management and Reform.

The BOJ raised its policy rate by 25bp to the highest level since 1995, with a 7-1