JPY Intraday Comment: Will the Takaichi administration become less tolerant of weaker JPY and higher yields?

Research evidence excerpt

JPY Intraday Comment: Will the Takaichi administration become less tolerant of weaker JPY and higher yields?

Global Markets Research

21 July 2026JPY Intraday Comment

Foreign Exchange - Global

Research AnalystsWill the Takaichi administration become less

Global FX Strategytolerant of weaker JPY and higher yields?

Yujiro Goto - NSC

USD/JPY extends gains, cabinet job approval ratings decline, and domestic yujiro.goto@nomura.com

investors step in as foreign investors sell JGBs. +81 3 6703 1120

Yusuke Miyairi, CFA - NIplc

• USD/JPY remains elevated, as JPY weakened after Japan’s holiday with no apparent yusuke.miyairi@nomura.com

intervention, while a light event calendar and high oil prices could keep pressure on +44 (0) 20 7102 4145

JPY in the near term.

Tomoki Hideshima - NSC

• The Takaichi administration may be signaling slightly more caution on the market’s tomoki.hideshima@nomura.com

reactions, as the cabinet’s Basic Policy added “stable price increases,” as reported earlier. +81 3 6703 1427

Falling job approval ratings, if sustained, could increase speculation over a potential policy Yuki Kodera - NSC

shift toward more domestic bond investment by pensions and households. yuki.kodera@nomura.com

+81 3 6703 1281

• JGB buying has shifted towards domestic investors, with life insurers and pension

funds purchasing super-long bonds in June, while foreign investors were net sellers;

attention now turns to whether this domestic demand stays firm, as policymakers

could encourage more domestic bond investment by pensions and households.

Fig. 1: Japan cabinet job approval rating Fig. 2: Net flows into super long term JGBs by investor type

Source: Yomiuri, Mainichi, Nikkei, Kyodo, JNN, Asahi, ANN, NHK, Sankei, Jiji, Nomura

Source: Macrobond, Nomura

USD/JPY edges higher