Matsuzawa Morning Report

Research evidence excerpt

Matsuzawa Morning Report

Global Markets Research

6 July 2026Matsuzawa Morning Report

Macro Strategy - Japan

Japanese bonds steepen to levels last seen around the time of Research Analysts

the Lehman crisis Strategy

Naka Matsuzawa - NSC

Is the market wrong about the terminal rate, or the neutral rate? naka.matsuzawa@nomura.com

+81 3 6703 3864

-5-10yrspreadshavesteepenedtolevelslastseenjustaftertheLehmancrisis,reflecting

thegapbetweentheterminalrateforecastandtheneutralrateforecast.

-AftertheLehmancrisis,momentumforratehikesdidnotpickupevenafterthe

economicrecovery,andneutralrateforecastsprovedwrong.

-Atpresent,centralbanksareunabletoadapttoanupwardshiftintheneutralrateand

couldbefallingbehindthecurve.

Today's Japanese market

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

also show limited upside (in overnight futures trading, bonds and equities were down 15

sen and JPY360, respectively, over OSE). In overseas markets on Friday, movements

were difficult to read with US markets closed, but the overall impression was one of

markets driven by excess liquidity. USD was weak against currencies other than JPY,

while gold, bitcoin, and EM markets rose. In the US stock futures market, Nasdaq futures

made substantial gains, suggesting that the tech sector was the driver. Tech and industrial

goods outperformed in the European stock market as well. Money seems to have flowed

out of bonds, with both European bonds and US bond futures down. In Europe, the yield

curve bear flattened and policy rate expectations rose. In the long zone, inflation

expectations and real yields both rose. In the FX market, JPY was weak, stuck in the

161.0-161.5 range against USD, and JPY fell against cross currencies.