SMBC Nomura Strategist: Yen Cannot Sustain Appreciation Without Japan's Fiscal Consolidation

According to SMBC Nomura Securities strategist Makoto Noji on July 3, yen appreciation cannot be sustained without fiscal consolidation by the Japanese government. Noji noted that widening yield curve differences in Western bond markets reflect Japan exporting "bad" rate increases driven by fiscal concerns. He added that if the U.S. conducts interest rate checks similar to those earlier this year, yen appreciation could accelerate, potentially signaling U.S. pressure on Japan to improve its fiscal position.
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