Nomura: Japanese Prime Minister's economic blueprint may influence the timing of the Bank of Japan's interest rate hike.
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South Korean President appoints Han Sung-sook as new Prime Minister
According to Mars Finance, South Korean President Lee Jae-myung appointed Han Sung-sook as the new Prime Minister on July 1st. The Blue House, the presidential residence, stated that Lee Jae-myung held an appointment ceremony for Han Sung-sook at the Blue House that day, formally presenting her with her appointment certificate. The Blue House previously stated that Han Sung-sook, who previously served as CEO of the South Korean internet company Navigator, is expected to be appointed Minister of Small and Medium Enterprises in 2025. She possesses extensive experience in the digital industry and business management, and is expected to drive South Korea's major transformation in artificial intelligence (AI), promoting economic innovation and national development. The South Korean media outlet Hankyoreh analyzed that the South Korean government will use Han Sung-sook's appointment as Prime Minister as an opportunity to accelerate the development of the AI industry and digital transformation, making AI a key engine for economic growth and enhancing national competitiveness. (Cailian Press)
Israeli Prime Minister: Regardless of whether the US and Iran reach an agreement, Israel will continue to oppose Iran's nuclear program.
Odaily Odaily reports that Israeli Prime Minister Benjamin Netanyahu stated on the 5th that he will continue to oppose Iran's nuclear program regardless of whether the United States and Iran reach an agreement. Netanyahu stated that in order to defend Israel's fundamental interests, the Israeli government will never allow Iran to acquire nuclear weapons.
Japan's Finance Minister reiterated that the government will respond appropriately to the yen's exchange rate.
Odaily Odaily reports that Japanese Finance Minister Satsuki Katayama stated on Friday that she would not comment on specific foreign exchange levels, but that the government is prepared to take appropriate measures to address currency fluctuations. At a regular press conference, Katayama also emphasized that the Japanese government has maintained close contact with US authorities regarding foreign exchange issues. Regarding the rising yields on Japanese government bonds, she stated that efforts will be made to implement fiscal policies to gain market confidence. Specific monetary policy decisions will be made by the Bank of Japan. It is expected that the Bank of Japan will maintain close communication with the government and will adopt appropriate monetary policy to stabilize and achieve its price target. Regarding the Bank of Japan's economic blueprint, she stated that there are currently no new developments. (Jinshi)
Sumitomo Mitsui: 10-year Japanese government bond yield may rise to 3% by the end of the year.
According to Odaily Odaily, Masahiro Ichikawa, a strategist at Sumitomo Mitsui DS Asset Management, said that as the Japanese economy remains on a steady growth trajectory, the yield on 10-year Japanese government bonds could reach 3% by the end of the year. He also predicted that if the government's large-scale investment plan can stimulate increased capital spending in the private sector, the Japanese stock market will have further room to rise. He added, "Regarding fiscal policy, Prime Minister Sanae Takaichi has expressed her intention to ensure market confidence, so the possibility of it becoming undisciplined seems low." The yield on 10-year Japanese government bonds rose 6 basis points to 2.830% at the latest. (Jinshi)
Market divergence in views on the yen's outlook has intensified, with a former Japanese finance official stating that a reasonable exchange rate should be around 130.
According to BlockBeats, on July 6th, as the USD/JPY exchange rate returned to around 162, market opinions on the yen's future trajectory became clearly divided. Tatsuo Yamasaki, former Vice Minister of Finance for International Affairs at the Ministry of Finance of Japan, stated that the current yen exchange rate has significantly deviated from a reasonable level, and a level around 130 yen to the dollar would be more in line with fundamentals. He added that he "would not be surprised" if the yen rose to that level. Meanwhile, some market participants held the opposite view. Jesper Koll, Executive Director of Monex Group, and Calvin Yeoh, an analyst at Blue Edge Advisors, believe that if the Bank of Japan continues to lag behind in the normalization of monetary policy, the USD/JPY exchange rate could even rise to 200 or higher. Yamasaki also warned that the Japanese government's recent lack of intervention in the foreign exchange market should not be interpreted as a lack of willingness to act. He stated that the Japanese Ministry of Finance has issued multiple warnings and demonstrated its willingness to intervene, and yen short positions still face the risk of being forced to close out. Market participants expect the Japanese government may still intervene in the exchange rate in mid-July.
South Korea's deputy finance minister said that the country is in close communication with Japan and its allies regarding exchange rate issues.
According to Odaily Odaily, South Korea's Deputy Finance Minister said on Thursday that South Korea is maintaining close communication with Japan and other major allies on foreign exchange issues, and warned that the won's exchange rate has seriously deviated from economic fundamentals. “We have always maintained close cooperation and information exchange with Japan and other relevant countries,” he said when asked whether South Korea would coordinate its exchange rate stabilization policy with Japan. “Currently, the Korean won exchange rate is out of sync with economic fundamentals.” When asked about any potential intervention measures, he declined to elaborate, but stated that the government is prepared to take stabilization measures should insufficient market liquidity lead to excessive exchange rate volatility. (Jinshi)