A strategic shift is underway among Japanese investors as higher domestic yields and a gradually normalizing monetary policy weaken the appeal of U.S. assets. Nomura Holdings, Inc. $8604.T estimates that the Japanese yen (JPY) could strengthen by roughly 6% against the U.S. dollar (USD) over the coming months, pushing the $USDJPY pair from 145 to 136 by the end of Q3.

Komatsu Ltd. $6301.T, Japan’s largest construction machinery manufacturer, has projected a sharp 27% decline in operating profit for the upcoming fiscal year, as macroeconomic headwinds intensify. Strengthening of the yen and fresh U.S. tariffs are expected to weigh heavily on the company’s bottom line, cutting an estimated $650 million from its earnings.