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2026-09-17 10:22:10
[Mitsubishi UFJ Morgan Stanley: Fed Rate Hikes Unlikely to Narrow US-Japan Interest Rate Spread, Yen Weakening Pressure Remains] (1) Keisuke Tsuruta, a securities strategist at Mitsubishi UFJ Morgan Stanley, said that if the Fed raises interest rates as the market expects—more than three times by the middle of next year—the interest rate spread between the US and Japan will hardly narrow, given that the market has already priced in the Bank of Japan's current policy path. (2) He pointed out that the large interest rate spread has been a major driver of the yen's weakness. (3) Tsuruta said that given that some committee members have pointed to the shift in global monetary policy when considering Japan's own policies, investors may remain sensitive to the possibility of the Bank of Japan accelerating its tightening pace. (4) The yield on 10-year Japanese government bonds fell 0.5 basis points to 2.990%.
