Morgan Stanley¡¯s Japan chief said he is hoping that the yen strengthens to around 140 against the dollar, and that Bank of Japan action is key for that to happen.

If the central bank fails to raise interest rates in June, that would have an impact on the bond and currency markets, Alberto Tamura said in a Bloomberg Television interview. The yen could either weaken to 170 versus the dollar or gain to 140, depending on how events unfold, he said, without giving a timeline.

¡°Some investors believe that the Bank of Japan is behind the curve, so hopefully taking action will be step number one,¡± said Tamura. ¡°If things stabilize around the world, maybe that could also be the path to a stronger yen.¡±

The yen remains under pressure even after Japanese authorities are assumed to have conducted a series of interventions to support the currency since late last month. Investors are closely watching whether the Bank of Japan will raise rates next month, as concerns over inflation and fiscal policy also fuel a rout in government bonds.

Japanese authorities won¡¯t want the yen to weaken significantly from the current level, Tamura said. The currency traded at 159.02 per dollar on Wednesday morning in Tokyo.

Finance Minister Satsuki Katayama told reporters on Tuesday that she pledged to ¡°take bold action as needed¡± on the yen after meeting with Group of Seven officials in Paris. Japan¡¯s currency gained against the dollar following her remarks, after it hit the weakest level since April 30 when the government conducted the first currency intervention since 2024.

Volatility in the bond and currency markets is one reason why business is booming for securities firms operating in Japan. Another is an uptick in corporate activity, as companies seek help to execute deals.

Morgan Stanley MUFG Securities ¡ª one of the U.S. firm¡¯s two joint venture brokerages with Japan¡¯s largest banking group ¡ª is likely to post a fourth straight year of record net revenue for the 12 months ended March, Tamura said in an interview in January.

At the same time, financial firms have had difficulties securing talent during a labor crunch. Tamura said Japanese government bond traders ¡°continue to be a target,¡± while adding that the peak of poaching them was ¡°probably around 2024, heading into 2025.¡±

Morgan Stanley will continue to collaborate with Mitsubishi UFJ Financial Group, its largest shareholder, for ¡°years to come,¡± Tamura said Wednesday. Their two ventures ¡ª Morgan Stanley MUFG Securities and Mitsubishi UFJ Morgan Stanley Securities ¡ª aim to unseat Nomura Holdings¡¯ main brokerage unit to become Japan¡¯s largest by net revenue.

Tamura said he doesn¡¯t have a timeline for achieving that target.

¡°But you...