mini-TOPIX MAR7 (TOPIXM2703)
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mini-TOPIX MAR7 (TOPIXM2703) News
JPMorgan: Risk of Bank of Japan rate hike in September has risen significantly
JPMorgan believes that the Japanese government's tax cuts and expanded fiscal support could boost demand and intensify inflationary pressures, further reinforcing the Bank of Japan's case for tightening monetary policy. Although the probability of a rate hike in September has increased, the bank maintains its call for an October hike, as acting earlier could trigger market bets on consecutive rate hikes, forcing the central bank to deviate from its gradualist approach.
The yen has only stabilized temporarily—what happens after the midterm elections?
Former Wall Street fund manager Ed Dowd believes that the timing of this intervention closely coincides with the U.S. midterm elections, and its primary objective is to prevent Japan from selling over USD 1 trillion in U.S. Treasury securities and to curb a sharp rise in U.S. Treasury yields, thereby avoiding pre-election economic turmoil that could harm the ruling party’s interests. However, structural issues such as the U.S.–Japan interest rate differential remain unresolved, and post-election political incentives to support markets will likely wane, potentially leading to renewed yen weakness and posing even sterner tests for financial markets.
Goldman Sachs Dissects the Yen Dilemma: Intervention Only Buys Time—Capital Inflows Are Key to a Long-Term Solution
① Goldman Sachs estimates that Japan may have deployed as much as USD 85 billion over two days at the end of July to intervene in the yen market—the largest scale since 2011—though the impact on the exchange rate was limited; ② The United States participated in the intervention for the first time by selling euros and buying yen, aiming to stabilize the yen while minimizing disruption to the U.S. dollar and Treasury markets; ③ Goldman Sachs believes that the yen's weakness stems primarily from interest rate differentials and capital outflows, and a single foreign exchange intervention is unlikely to alter the underlying long-term fundamentals.
U.S. Treasury Secretary repeatedly voices concerns to exert pressure! Will the Bank of Japan be 'forced to act' in September?
Following their joint intervention in the foreign exchange market, U.S. Treasury Secretary Bessent has recently been repeatedly urging Japan to raise interest rates, putting significant pressure on the Bank of Japan ahead of its September policy meeting.
Trillion-yen intervention merely addresses symptoms, not root causes? Japan's 10-year JGB auction fails badly, yield surges toward critical 2.90% level
Japan's 10-year government bond auction saw the weakest demand in recent years, with the auction's price decline marking the second-largest drop this century. The reoffer yield plunged to 2.56%, the lowest level since May 2025, signaling market dissatisfaction with the Bank of Japan's policy stance. Analysts warn that if the Bank of Japan continues to refrain from signaling an interest rate hike, not only will Japanese government bonds come under further pressure, but global bond markets could also face a fresh wave of selling.
With the yield spread mountain unmoved, can even U.S.-Japan cooperation save the yen?
Analysts noted that unless the Federal Reserve restarts its rate-cutting cycle or the Bank of Japan further raises interest rates, the U.S.-Japan interest rate differential is unlikely to narrow, making it difficult for the yen to achieve meaningful and sustained appreciation.
U.S.-Japan Joint Intervention: A New 'Plaza Accord,' the Dawn of Bretton Woods II, and the End of the Yen Carry Trade Era
The United States and Japan have launched an unprecedented joint intervention in the foreign exchange market to support the yen, driving the yen’s exchange rate up sharply from a near 40-year low to 157.40 within two days. As Japan is forced to sell U.S. Treasury securities to defend its currency, and as major technology firms shift from being providers of savings to consumers of credit, the decades-old yen carry trade logic underpinning the global financial system is collapsing—ushering in a transformative realignment of the global macroeconomic architecture.
Trump’s high-profile endorsement of U.S.-Japan coordinated market support and the leak of Bessent’s notes have sent yen short-sellers into a panic.
Trump acknowledged U.S. involvement in last Sunday's yen intervention, calling it a 'gesture of friendship' and stating that the U.S. profited from it. Bessent’s meeting notes were accidentally leaked! U.S.-Japan coordinated action is ongoing, short sellers have been targeted, and the market is closely watching for the next move.
Did Japan really intervene? Data suggests it may have sold ¥8.45 trillion on Thursday; Japanese media report it could act again on Friday, with the U.S. reportedly stepping in on the same day.
According to reports, the U.S. Treasury Department notified several banks on Friday that it might intervene in the yen market that same day and instructed them to 'prepare for follow-up actions.' The Federal Reserve Bank of New York requested at least two major U.S. banks to provide quotes for the yen/euro exchange rate—a move widely seen as a precursor to intervention. Japan’s top foreign exchange official declined to comment but noted that Tokyo had received support from Washington beyond mere moral backing. Bessent stated that the U.S. Treasury remains in close coordination with Japanese authorities, and recent remarks by him suggest an increased willingness to cooperate on intervention. Institutions such as Goldman Sachs remain vigilant about the possibility of Japan taking further action after its intervention on Thursday.
“Intervention rumors” confirmed? BOJ data suggests it intervened on Thursday, with a possible scale of JPY 8.45 trillion; Finance Minister declines to comment
The Japanese government may intervene again in the foreign exchange market on July 30, with a scale of approximately JPY 8.45 trillion, causing the USD/JPY exchange rate to plunge by nearly 500 pips and break below the 158 level. Although authorities have not officially confirmed this, market participants widely believe the signs of intervention are evident. Meanwhile, the Bank of Japan kept interest rates unchanged, and Kazuo Ueda sent a hawkish signal, though it did not significantly alter market expectations. Analysts note that, given the persistently wide interest rate differential between the U.S. and Japan, the yen is likely to remain under long-term downward pressure.
Express News | The Bank of Japan voted 8-1 to keep interest rates unchanged and indicated it would raise rates depending on circumstances.
AI-driven trading makes a strong comeback! The KOSPI surged 16%, setting a record high. Choi Tae-woon, positioned just below the mandatory disclosure threshold, scooped up shares at the bottom, triggering a sharp rally in SK Hynix. The Nikkei 225 breached
Asian stocks rose on Friday, with the KOSPI surging more than 14% in a sharp rebound from three consecutive days of declines. SK Hynix and Samsung Electronics both gained over 25%. Buoyed by this rally, the MSCI Asia Pacific Index posted its second straight day of gains. The yen edged lower on Friday after recording its biggest single-day gain in over two years in the previous session, with the USD/JPY briefly climbing back to around 160.33.
After the yen surged 3.3%, the Bank of Japan’s policy decision faces uncertainty: following intervention, will it raise rates again?
The yen surged 3.3% intraday on Thursday, sparking market speculation that Tokyo had once again intervened. Observers noted that Japan’s previous currency-stabilizing interventions were each followed by interest rate hikes. With the Bank of Japan announcing its policy decision today, investors are reassessing whether Kazuo Ueda has signaled a more hawkish stance.
Has intervention finally begun? The USD/JPY exchange rate falling below the 159 mark sparks speculation of market intervention!
Market analysts noted that if Japanese authorities indeed take action this time, the funding is very likely to come from a reduction in foreign exchange reserves. Such an operation—selling U.S. Treasuries to buy yen—has become a standard tool in Japan’s arsenal for countering excessive depreciation of its currency.
The Cost of 'Saving the Yen': Will Japanese Stocks Repeat the Sharp Decline from Two Years Ago?
The nightmare of TOPIX plunging 24% in a single month in August 2024 remains vividly fresh. Goldman Sachs analysts have warned that although the probability of a yen flash crash is lower than it was two years ago, positioning in Japanese equities is now even more crowded than it was prior to the previous crash—foreign net positions are over 20% higher, and hedge fund allocations have reached the 99th percentile over the past five years. Should the AI narrative unravel or a geopolitical black swan event materialize, this storm could prove even more severe than the last.
A decline in Sanae Takaichi's poll ratings could trigger additional fiscal stimulus; vigilance warranted as risks in Japanese markets spill over globally via yield channels into equities and bonds.
Prime Minister Sanae Takaichi's approval ratings continue to decline, which could prompt the government to adopt a more accommodative stance on spending and taxation. If polling results keep deteriorating, the government may place greater emphasis on stimulus measures, which would be negative for both bonds and the yen.
Goldman Sachs: Raised 12-month target for Japan's TOPIX index to 4,500; weaker yen supports corporate earnings
Gelonghui, July 27 | Goldman Sachs has raised its 12-month target for Japan's benchmark TOPIX index from 4,400 to 4,500 points, citing expectations that a weaker yen will boost corporate earnings, despite the potential for near-term market volatility stemming from artificial intelligence prospects and geopolitical tensions. The bank’s foreign exchange team now forecasts the USD/JPY exchange rate to reach 162 in three months, 163 in six months, and further climb to 165 in 12 months. Accordingly, the assumed annual USD/JPY exchange rates have been revised: 162 for fiscal year 2026, 160 for fiscal year 2027, and
Today, investment trusts including 'DC Global Economy Core' were established.
Inception Date Fund Name Management Company Investment Region Investment Assets -------------------------------------------------------------------------- 7/23 DC Global Economy Core Sumitomo Mitsui Trust Asset Management Global (Mixed Domestic and Overseas Assets) -------------------------------------------------------
No investment trust has been established today. [Investment Trust Establishment Schedule]
Launch Date Fund Name Management Company Investment Region Investment Asset Class -------------------------------------------------------------------------- 7/17 Listed Index Fund Tokyo Stock Exchange REIT High Dividend 30 Amorva Asset Management Domestic Real Estate Investment Trusts --------------------------------------------
Citi raises year-end S&P 500 target to 8,100 and upgrades Japanese equities to 'Overweight'
Citi published a research report noting that global equities have cumulatively risen by approximately 10% year-to-date, though gains have been concentrated in technology stocks. With geopolitical risks easing and AI-related trades becoming crowded, signs of capital rotation are emerging. Citi expects investor focus has now shifted to whether the rally will broaden into other sectors in the second half of the year. According to Citi, such broadening will depend on sustained cyclical improvement in macroeconomic conditions and earnings-per-share expectations, as well as whether the exceptional outperformance of tech stocks has temporarily run its course. Citi continues to anticipate elevated volatility related to AI over the coming quarter and maintains its medium-term 'overweight' stance on global information technology and U.S. equities. It has downgraded its rating on Japanese equities from 'underweight' to...