Yen and interest rates have risen! What do strategists think about bank stocks continuing to grow in response to Bank of Japan Governor Ueda's remarks?

In response to Bank of Japan Governor Ueda Kazuo stepping in and making statements aimed at normalizing monetary policy, in the Tokyo stock market on 11-12, purchases anticipating profit margins and expansion due to rising interest rates gathered in bank stocks and insurance stocks. In an interview published in the morning edition of the Yomiuri Shimbun dated 9th, Mr. Ueda suggested that the possibility that the data that determines a virtuous cycle of wages and prices will be available by the end of the year is not zero, and the outlook for interest rates spread.

The TOPIX banking index rose 5.5% this week, and the yield on new 10-year government bonds, which is an indicator of long-term interest rates, temporarily rose to 0.71%, the level since 2014. The exchange rate of yen moved sharply in the direction of appreciation of the yen, in the first half of the 146 yen range.

Many experts expressed their thoughts surrounding the purpose of Mr. Ueda's statement and market reactions through reports and responses to Bloomberg, etc. Hirokazu Kabeya, chief global strategist at Daiwa Securities, expressed a sense of incongruity with the strength of the market reaction, saying, “In order for monetary policy to move towards normalization, it is necessary that conditions such as fixed inflation must be met, and expectations cannot be seen ahead of schedule.” Chief bond strategist Mukuruma Harumi of Mitsubishi UFJ Morgan Stanley Securities has shown the view that it is a statement to fight back against the depreciation of the yen.

Senior interest rate strategist Okumura Hitoshi of SMBC Nikko Securities stated that “Governor Ueda's statement will raise expectations that price materials will be ready by the end of the year and policy revisions will be raised in January next year,” and pointed out that “the sense of live (presence) of live performances (presence) of meetings within the year will also increase” due to exchange rate trends. Senior strategist Katsutoshi Inadome of Sumitomo Mitsui Trust Asset Management stated that “the content of the statement was more hawkish than the Tamura deliberation committee,” and expressed the view that the intention was to factor in financial normalization by canceling negative interest rates.

The Bank of Japan will hold monetary policy meetings on the 21st and 22nd of next week, and Governor Ueda's press conference will be held on the afternoon of the 22nd after the decision is made.