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Bloomberg Surveillance TV: August 3rd, 2026

Bloomberg Surveillance

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Tim Stenovec, CIBC, writing, compared to the April-May interventions, the latest round arguably carries more weight because of the coordinated moves by the US Treasury. Jeremy joins us now for more. Jeremy, there are some underlying problems in Japan. There is a term of trade shock, and welcome to the programme, buddy. It's always good to see you. Good morning. You're facing a term of trade shock that oil has contributed to. You've got deficit issues as well, and massive rate differentials with the US. Why does this intervention help them fight those three?

Well, indeed, you are talking about, in effect, a containment policy, because unless the oil price is going to come down materially, or unless the interest rate spread between the US and Japan closes exponentially, and that would imply that the BOJ would have to bring forward, not only bring forward their policy tightening, but be more aggressive, and perhaps the market reprice the Fed expectations. It is seemingly more of a containment issue. But I've just been listening with great interest to your discussion with Lisa regarding the holdings of Treasuries by Japanese investors,

and I think that is particularly notable. I think that twist steepening that we did see in terms of the US curve after last Wednesday's Fed decision, I think, was also notable. And I think if we go back to Liberation Day and the post-liberation day period, it was the discipline of the bond market that really exercised control on the politicians. So I think it is that sort of bond market dynamic that I think is proven to be contingent here in terms of this broader narrative regarding the dollar/yen exchange rate. Jeremy, just to take that a step further,

Bloomberg Surveillance TV: August 3rd, 2026

Read the full transcript

The candid version is on a podcast,
not the earnings call.

Bloomberg Surveillance TV: August 3rd, 2026

Read the full transcript

The candid version is on a podcast, not the earnings call.

The candid version is on a podcast,
not the earnings call.