Matsuzawa Morning Report

Research evidence excerpt

Matsuzawa Morning Report

Global Markets Research

19 June 2026Matsuzawa Morning Report

Macro Strategy - Japan

Research Analysts

Two perspectives on timing of FX Intervention Strategy

Naka Matsuzawa - NSC

Wait for US rates to stabilize, or prioritize stability in Japanese rates? naka.matsuzawa@nomura.com

+81 3 6703 3864

• Stable outlook on US policy rate is essential to enhance the effectiveness of FX

interventions; should authorities wait for the key US job report?

• If JPY weakness and steepening along the curve begin to reinforce each other,

intervention may become unavoidable even before US rates stabilize; it may also be

necessary to signal an earlier BOJ rate hike.

• As long as there are no signs of a change in Prime Minister Takaichi's stance, it will be

difficult to keep the exchange rate at a certain level; Japan may have no choice but to

accept exchange-rate levels driven by overseas interest rates.

Today's Japanese market

In Japanese markets on Friday, this author expects equities to continue rising and bonds

to remain in a decline (in overnight futures trading, bonds were down 17 sen and equities

were up JPY760 over OSE). In overseas markets yesterday, the impact of the hawkish

surprise at the FOMC subsided, and momentum turned risk-on while bonds began to

strengthen, but the flow to USD assets actually accelerated. Conversely, bitcoin and gold

continued to fall. In the US bond market, near-term rate hike expectations barely changed,

and the market priced in about 1.5 rate hikes for this year. Long-term inflation expectations

were almost unchanged, and real yields fell back, richening against swaps and pointing to

improved supply/demand. In the US stock market, in addition to tech stocks, cyclicals such