SMBC Nikko: Japan could be on the brink of a historic collapse in the yen
The Chancellor of the Exchequer has stated that the government will take appropriate action in the foreign exchange market if necessary.
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Japan could be on the brink of a historic collapse of the yen, due to the risk of a prolonged surge in oil prices and the government’s fiscal easing, according to Makoto Noji, a strategist at SMBC Nikko Securities.
Noji argues that whilst cost-driven inflation has weighed heavily on the Japanese public over the past three years, stimulating demand at this point would only serve to accelerate inflation.
“I hope to see growing recognition that further yen-buying is necessary, alongside self-help measures – in particular interest rate rises and a halt to fiscal expansion – to prevent inflation and a weakening of the yen,” he says.
Finance Minister Satsuki Katayama stated on 2 June 2026 that the government would take appropriate measures in the foreign exchange market if necessary.
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