Core Viewpoint - Former Bank of Japan Governor Haruhiko Kuroda suggests that the yen may appreciate to a level of 120-130 yen per dollar due to a narrowing interest rate differential between Japan and the U.S. [1] Group 1: Currency Outlook - Kuroda indicates that the current exchange rate of approximately 153 yen per dollar is too weak and expects it to revert to 120-130 yen [1] - He believes that the contrasting monetary policies of the Federal Reserve and the Bank of Japan will naturally reduce the interest rate differential, aiding the yen's appreciation [1] Group 2: Monetary Policy Context - The Bank of Japan's recent decision to maintain interest rates aligns with market expectations, passing with a 7-2 vote, while two members proposed a 25 basis point increase [1] - Market reaction to the decision was relatively muted, with little change in the 10-year Japanese government bond yields and a slight decline in the yen [1] Group 3: Economic Indicators - Kuroda notes that Japan has achieved its 2% inflation target, with an economic growth rate of approximately 1.5% and an unemployment rate of only 2.6% [2] - He suggests that current economic conditions are suitable for the Bank of Japan to consider further interest rate hikes [2] Group 4: Future Expectations - A majority of economists surveyed expect the Bank of Japan to raise interest rates in January next year, despite two members opposing the current decision [2] - Kuroda highlights that the Bank of Japan's recent decisions reflect a desire to observe the impact of U.S. tariffs on the Japanese economy, which has been less significant than previously anticipated [2]

周一早上，东京股市迎来了一个历史性的时刻，日经指数一举突破47,000点，创下了前所未有的新高。这一涨幅比上周五大幅上涨了近3%，瞬间成为了全 城热议的话题。金融圈震动不已，连普通市民也在讨论股市的"疯狂"，有的人甚至开玩笑说："现在闭着眼睛买股票，肯定能赚钱。" 这股席卷全国的投资热情，让不少人感到久违的兴奋，而推动这一切的关键人物，正是日本政坛的高市早苗。就在刚刚过去的周末，执政党自民党选出了新 的党魁，64岁的高市早苗在激烈的竞争中脱颖而出，成为党首。这一党内选举，为何会引发如此大的市场反应？答案就在于她与前首相安倍晋三的紧密关 系。高市早苗被广泛视为安倍的忠实门徒和"安倍经济学"的继承者。 在选举结果尚未公布之前，敏锐的投资者们已经预见到了这一变化的可能性，纷纷涌入股市，抛售代表避险的长期日本政府债券。投资者们赌的是，高市一 旦上台，必定会重启安倍时代那套激进的经济刺激政策。 周一开盘，股市如同脱缰的野马，迅速飙升。日经指数不仅创下历史新高，甚至连广泛代表市场走势的东证指数也同步上涨，东京证券交易所一片红火，充 满了投资者的欢欣鼓舞。 然而，高市早苗的胜利之路并不轻松。事实上，这是她第三次竞选党魁。自 ...

Core Viewpoint - The Japanese yen has weakened significantly, with the USD/JPY exchange rate rising to 153.27, reflecting a cumulative rebound of over 7.5% since late April, prompting concerns from Japanese officials about potential market volatility and inflationary pressures [1][2]. Group 1: Currency Market Dynamics - The USD/JPY exchange rate has increased by more than 3.6% this week alone, indicating a rapid upward trend [1]. - Japanese Finance Minister Kato Katsunobu expressed concerns over "one-sided rapid fluctuations" in the currency market and emphasized the need for stability that reflects economic fundamentals [1]. - The recent depreciation of the yen is attributed to policy expectation adjustments following the Liberal Democratic Party leadership election, which has led to significant market volatility [1][2]. Group 2: Policy Implications - Newly elected Prime Minister Kishi Sayaka is expected to advocate for aggressive fiscal stimulus and maintain a loose monetary policy, which has diminished market expectations for a near-term interest rate hike by the Bank of Japan [2][3]. - Economic advisor Honda Yoshirou suggested that raising interest rates in October may be challenging, recommending a delay until December [2]. - The joint statement from the Japanese government and the Bank of Japan, which has underpinned over a decade of ultra-loose monetary policy, may be re-evaluated under Kishi's leadership [2]. Group 3: Market Sentiment and Predictions - Following Honda's comments, the probability of a Bank of Japan rate hike in October dropped to below 20%, down from approximately 68% prior to the election [3]. - The options market indicates a shift in sentiment, with a decrease in demand for bullish yen positions, suggesting a cautious outlook for the yen in the short term [3][4]. - Despite short-term bearish sentiment, there remains a cautious optimism for the yen's long-term strength, as traders are still willing to pay higher premiums for put options on USD/JPY [4]. Group 4: Intervention Speculations - Speculation about potential foreign exchange interventions by Japanese authorities has increased, especially if the USD/JPY approaches the psychological level of 160 [4]. - Since 2022, the Japanese Finance Ministry has reportedly utilized approximately 24.5 trillion yen (around 160 billion USD) to support the yen [4]. - Analysts suggest that significant movements in the USD/JPY exchange rate could trigger policy responses from both the Japanese and U.S. governments to prevent excessive appreciation of the dollar against the yen [4].

Core Insights - Japan's exports fell by 2.6% year-on-year in July, marking the third consecutive month of negative growth, exceeding economists' forecast of a 2.1% decline [1] - Imports decreased by 7.5% year-on-year, but the decline was less than the expected 10.4%, resulting in a trade deficit of 117.5 billion yen (approximately 79.55 million USD) for the month, contrary to the anticipated surplus of 196.2 billion yen [1] - The persistent weakness in exports reflects the ongoing pressure from U.S. tariffs on global trade, impacting Japan's export-oriented economy, particularly in key sectors like automotive and electronics [1] Trade Dynamics - The dual pressures of tightening credit from ongoing interest rate hikes by central banks in the U.S. and Europe, along with the rise of manufacturing in emerging markets in Southeast Asia, are leading to a diversion of orders away from Japan [1] - The resilience in import data highlights structural contradictions within the Japanese economy, where the depreciation of the yen has increased cross-border procurement costs for companies, despite a decline in energy prices alleviating some cost pressures [1] Economic Implications - The imbalance in trade, characterized by "more imports than exports," exacerbates the risk of depleting foreign exchange reserves [1] - Analysts suggest that if the trade deficit persists, the Bank of Japan may be compelled to extend its ultra-loose monetary policy, further delaying the normalization of the yen, which could increase living cost pressures for households already struggling with inflation [2]

Core Viewpoint - Goldman Sachs suggests that the Bank of Japan (BOJ) will likely choose to gradually sell its ETF holdings in the market rather than transferring them to the government when it decides to reduce its ETF holdings [1] Group 1: Background and Context - The BOJ began purchasing ETFs in 2010 as part of its ultra-loose monetary policy aimed at revitalizing the sluggish economy, a practice that has continued for 13 years [1] - Although the BOJ stopped purchasing ETFs last year, it has not yet announced when or how it will dispose of its approximately 37 trillion yen (about 252 billion USD) in ETF assets, which have a market value of around 70 trillion yen [1] Group 2: Principles for Asset Disposal - The BOJ has stated that it will base its decision to reduce these assets on three principles: selling at an appropriate price, avoiding losses for the central bank, and minimizing market disruption during the sale [1] - Goldman Sachs indicates that a method to satisfy these three conditions may involve gradually selling small amounts of ETFs in the open market [1]

Core Viewpoint - The Bank of Japan is gradually reducing its bond purchases, transitioning from an ultra-loose monetary policy to a more market-driven approach, while maintaining a policy interest rate of 0.5% [1][2]. Group 1: Monetary Policy Adjustments - The Bank of Japan decided to continue reducing its purchases of Japanese government bonds, decreasing the quarterly reduction from 4 trillion yen to 2 trillion yen starting in April 2026 [1]. - By March 2026, the monthly bond purchase amount will decrease from 5.7 trillion yen to 2.9 trillion yen, with further reductions planned for 2027 [1][2]. - The central bank will retain the flexibility to increase bond purchases if there is a surge in interest rates, with evaluations scheduled for June 2026 [1]. Group 2: Bond Holdings and Market Impact - Since the initiation of the ultra-loose monetary policy in 2013, the Bank of Japan has accumulated approximately 560 trillion yen in government bonds, representing 52% of the issuance balance [2]. - The central bank plans to phase out bond purchases to avoid market disruption, with expectations that bond holdings will decrease by 16-17% by March 2027 compared to June 2024 [2]. - To enhance liquidity in the bond market, the Bank of Japan has relaxed conditions for financial institutions to purchase bonds directly without returning them [2]. Group 3: Economic Considerations - The impact of U.S. tariff policies has not yet shown significant negative effects on Japan's economic statistics, but the Bank of Japan is closely monitoring potential adverse effects on wage growth and capital investment [3].

Group 1 - The article highlights the recent surge in the 30-year U.S. Treasury yield surpassing 5%, attributed to Moody's downgrade of the U.S. credit rating from Aa3 to Aa1, leading to market concerns over U.S. fiscal stability [1] - The U.S. government is pushing for a tax reform bill that aims to extend significant tax cuts from Trump's first term, potentially reducing taxes by over $4 trillion and cutting at least $1.5 trillion in spending over the next decade, which is expected to further impact U.S. Treasury sales [2] - The combination of tariff and tax policies is raising concerns about the stability of the U.S. economy, prompting investors to express their apprehensions through the sale of U.S. Treasuries [2] Group 2 - The deterioration of the U.S. fiscal situation and increased economic uncertainty are leading sovereign funds and large investors to replace U.S. Treasuries with other safe-haven assets, which could raise U.S. financing costs and exacerbate the fiscal deficit [3] - Japan, as the largest holder of U.S. Treasuries, is experiencing a rapid rise in its own bond yields, indicating a potential loss of confidence in both U.S. and Japanese government bonds, which could destabilize the global safe-haven asset market [3] - The era of ultra-loose monetary policy in both the U.S. and Japan may be coming to an end, which could have significant repercussions for global capital markets and real economies, potentially affecting external demand and exports from countries like China [4]

Group 1 - The core viewpoint is that the recent downgrade of the US credit rating by Moody's has reignited concerns over US fiscal issues, leading to increased selling of US Treasury bonds [1][2] - The US government is pushing for a tax reform plan that aims to extend significant tax cuts from the Trump administration, which could result in over $4 trillion in tax cuts and at least $1.5 trillion in spending cuts over the next decade [2] - The combination of tariff policies and tax cuts is expected to impact the stability of the US economy and create unpredictable shocks to the financial system, prompting investors to express their concerns through the sale of US Treasuries [2] Group 2 - The deterioration of the US fiscal situation and increased economic uncertainty are causing sovereign funds and large investors to replace US Treasuries with other safe-haven assets, which may raise US financing costs and worsen the fiscal deficit [3] - The rise in US Treasury yields has not led to an increase in the dollar's value, indicating a continued outflow of long-term capital from the US [3] - Japan's bond market is also experiencing rising yields, with recent auctions for 30-year and 40-year bonds facing a lack of buyers, suggesting a failure of the yield curve control mechanism [3] Group 3 - The era of ultra-loose monetary policy in both the US and Japan may be coming to an end, which could have significant impacts on global capital markets and the real economy [4] - This external environment may lead to reduced external demand, potentially affecting exports from other countries, while also providing more autonomy for domestic monetary policies [4]