智通财经网·2026-01-20 23:53Core Viewpoint - Japanese Prime Minister Fumio Kishida announced the dissolution of the House of Representatives on January 23, with early elections scheduled for February 8, emphasizing the need for bold investment in risk management and a departure from excessive tightening [1] Group 1: Economic Policies and Market Reactions - Kishida's administration is characterized by expansionary fiscal and monetary policies, raising concerns about rapid government spending and the resurgence of inflation [1] - The traditional correlation between the yen and U.S. Treasury yields is breaking down, prompting HSBC strategists to revise their forecasts for the yen's performance in the coming months [1] - Since early October, the yen has depreciated approximately 7% against the dollar, despite a narrowing yield gap of nearly 60 basis points between Japanese and U.S. 10-year bonds [1] Group 2: Currency Dynamics and Predictions - HSBC strategists noted a "wedge difference" reflecting an expanded "risk premium" for the yen, driven by concerns over debt monetization, declining purchasing power, and persistent inflation with negative real interest rates [1] - The recent sell-off in Japanese government bonds has led to a spike in yields, prompting calls for market participants to remain calm from Japan's Finance Minister [4] - HSBC now predicts the yen will depreciate to around 160 yen per dollar by mid-year, a shift from previous expectations of strengthening to 150 yen per dollar [4] Group 3: Potential Factors Influencing the Yen - Factors that could potentially prevent further short-term depreciation of the yen include a slowdown in the U.S. economy, positive real yields on Japanese bonds, credible fiscal consolidation plans, and checks on aggressive fiscal expansion within the parliament [5][6] - The Bank of Japan's upcoming interest rate decision is expected to maintain the current benchmark rate, which may not provide direct support for the yen [6] Group 4: Government Intervention and Market Sentiment - Traders are on high alert for potential intervention by Japanese authorities if the yen continues to weaken, especially as it approaches critical levels [7] - Japan's Finance Minister indicated that all options, including direct market intervention, are on the table to address excessive volatility [7] - The upcoming press conference by Bank of Japan Governor Kazuo Ueda is anticipated to provide insights into the central bank's stance amid the yen's depreciation [8]