MUFG Sees Japanese Rates Heading Higher on Tankan, Capex, Inflation

MUFG strategist Michael Wan argues that Japanese interest rates "clearly have to head higher" following the latest Tankan survey, which showed improving business sentiment. He also points to robust capital investment appetite and accelerating inflation as factors pushing rates up.

Wan warns that higher domestic rates heighten the risk of currency intervention by Japanese authorities. The comments come amid ongoing pressure on the yen, with markets watching for any policy response from the Bank of Japan or the Ministry of Finance.