Matsuzawa Morning Report: Macro Strategy - Japan

Research evidence excerpt

Matsuzawa Morning Report: Macro Strategy - Japan

Global Markets Research

10 July 2026Matsuzawa Morning Report

Macro Strategy - Japan

Research AnalystsFed likely to focus more on AI-led inflation than high oil prices

Strategy

Naka Matsuzawa - NSC

Market remains skeptical despite changes to Basic Policy naka.matsuzawa@nomura.com

+81 3 6703 3864

-NewYorkFedPresidentJohnWilliamsviewsAIdemandasthemostimportant

inflationaryfactor.

-ComparedwiththeperiodjustaftertheJuneFOMC,expectationsfornear-termrate

hikeshavedeclinedwhileexpectationsforratehikesfurtherouthaverisen,suggesting

thatthemarketisrulingoutanimmediatehikebutremainsmindfuloftheriskof

consecutiveincreases.

-Evenasoilpricescontinuetofall,overseasinvestorspersistinsellingJapanesestocks

andbonds,possiblyreflectingcautionabouttheTakaichiadministration’sreflationary

policies.

-WebelievePrimeMinisterTakaichiherselfneedstosignalthatsherecognizesthatit

wouldbebadfortheeconomyiftheBOJfellbehindthecurveandthatshewouldaccept

anearlyratehike.

Today's Japanese markets

In Japanese markets on Friday, this author expects both equities and bonds to be solid (in

overnight futures trading, bonds and equities were up 12 sen and JPY1,140, respectively,

over OSE). In overseas markets yesterday, a pause in oil's rise on Middle East concerns

spurred both a rally in bonds and risk-on sentiment. In the US stock market, tech stocks

led gains, while cyclical sectors such as banks and consumer-related names also drove

the market higher. Within the tech sector, semiconductor stocks were strong, but the Mag

7 and software stocks also gained. In the US bond market, rate hike expectations fell and

the short and intermediate zones drove gains. In the long zone, real yields and inflation

expectations both fell.