Matsuzawa‘s View: Macro Strategy Weekly

Research evidence excerpt

Matsuzawa‘s View: Macro Strategy Weekly

Global Markets Research

Matsuzawa's View: Macro Strategy Weekly 24 July 2026

Macro Strategy - Japan

Research AnalystsLower approval ratings and Takaichi

Strategyadministration's response

Naka Matsuzawa - NSC

If reflationary measures are reinforced, risk of market turmoil similar to naka.matsuzawa@nomura.com

2024 could increase +81 3 6703 3864

• This author expects equities and bonds to be solid, USD flat, and JPY soft in the week

of 27 July.

• The upcoming monetary policy meetings in Japan and the US are unlikely to provide

catalysts that would lift market expectations for policy interest rates further.

• The BOJ will find it difficult to signal a September rate hike before the Takaichi

administration does so; JPY would remain weak if expectations for BOJ and Fed rate

hikes remain unchanged.

• The real cause of the drop in the government’s approval rating is not clear, and so

there is a risk that the Takaichi administration could make policy errors.

• If the government takes a more reflationary stance with the aim of restoring its

approval rating, JPY could weaken and the bond market's yield curve steepen further.

A week to assess the real factors driving weak JPY

In the week of 27 July, the main theme is likely to be the real drivers behind JPY's

weakness. Sub-themes include the degree of hawkishness in US and Japanese monetary

policy, the severity of the extent to which the BOJ has fallen behind the curve, analysis of

the factors behind the decline in support for the Takaichi administration and a possible

policy response, JPY carry trades, Middle East tensions and oil prices, capital rotation

within and outside of tech stocks, and interest in cyclical and value stocks. The factors to