JPY Intraday Comment

Research evidence excerpt

JPY Intraday Comment

Global Markets Research

28 July 2026JPY Intraday Comment

Foreign Exchange - Global

Research AnalystsMarkets focus on tax cut financing while USD/JPY

Global FX Strategystays elevated

Yujiro Goto - NSC

Risk of a Fed surprise hike is supporting USD/JPY, US likely supports yujiro.goto@nomura.com

Japan’s intervention, “Strategic Investment Initiative” to be FX neutral. +81 3 6703 1120

Yusuke Miyairi, CFA - NIplc

• USD/JPY stayed firm in the upper 163 level, as persistent expectations of a July yusuke.miyairi@nomura.com

FOMC rate hike—a risk of a surprise under Chair Warsh—kept USD broadly strong. +44 (0) 20 7102 4145

• A food consumption tax cut is likely, but funding is the key issue. Media reports Tomoki Hideshima - NSC

suggest the government will likely cut the food tax to 1% from April 2027, while the tomoki.hideshima@nomura.com

market will focus on how it is financed. If funding is unclear, it could unsettle the JGB +81 3 6703 1427

market and weaken JPY. Yuki Kodera - NSC

yuki.kodera@nomura.com • Japan’s stance on intervention appears to be more aligned with the US. US

+81 3 6703 1281

investment under the “Strategic Investment Initiative” may be more FX-neutral if

financed through dollar funding, reducing concern that such investment will add to JPY

weakness.

Fig. 1: Policy issues want to be prioritized (Nikkei opinion poll) Fig. 2: Funding structure for the investment agreement with

the US

Source: Nikkei, Nomura

Source: MOF, METI, Nomura

USD/JPY remains elevated

In the FX market at the start of the week, USD initially fell broadly, reflecting the correction

in crude oil prices, and USD/JPY also adjusted down to the low 163 level. However, amid

persistent expectations of a possible rate hike ahead of the July FOMC, USD/JPY has