Nikko Securities: Without fiscal consolidation, the yen cannot sustain its appreciation

Golden Ten Data reported on July 3 that Makoto Noji, a strategist at SMBC Nikko Securities, stated that the Japanese yen cannot sustain appreciation without a firm commitment from the Japanese government to fiscal consolidation. He pointed out that the recent widening of the spread between short-term and long-term yields in Western bond markets indicates that Japan has already begun exporting "unhealthy" yield increases caused by fiscal concerns to Western countries. He also said that if the United States conducts interest rate checks as it did earlier this year, the appreciation of the yen could accelerate. He added that such a move by the U.S. might indicate that the U.S. is demanding Japan to improve its fiscal situation.