The yen slipped further on Tuesday as the lack of official intervention encouraged traders to short the currency. Fears of a surprise yen-buying move by Tokyo capped further losses though.
Sustained inflation driven by a depreciating yen could hit consumer sentiment when the Takaichi's government embarks on an ambitious economic programme, according to MUFG.
Although rising investment loan demand after deflation boosted Japanese banks, labour ministry data revealed that workers' real wages fell for four consecutive years through 2025.
Japan's real wages rose 1.4% in May from a year earlier to mark a fifth month of increases, despite slowing growth amid re-accelerating consumer inflation, government data showed.
Despite the yen plunging to a 40-year low against the greenback, global asset managers are holding steady on their exposure. Markets have tampered down expectations of US rate hikes.
While global markets resiliently weathered a billion-barrel oil deficit, eroded cushions and persistent geopolitical tensions keep tail risks of price spikes elevated.
EBC Financial Group analyst says the yen established a prominent horizontal resistance zone around 161.85 per dollar. If it does not break below the level decisively again, a rebound towards 160.5 per dollar is likely.
Asset recap
As of market close on 6 July, among EBC major products, Tesla shares led gains as its robotaxi expands to Miami, as the EV maker looks to expand its autonomous ride-hailing operations.
A report said AutoZone made a buyout offer for Genuine Parts' auto parts distribution arm, weighing on sentiment. The shares stay tied to its large store network and repair-part demand.
Hong Kong stocks extended their rebound on expectations of an AI asset restructuring. Meanwhile, the innovative drug sector strengthened, buoyed by improving fundamentals.
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