(Reuters) - Jefferies Financial ( JEF ) will strengthen its presence in Canada through an expanded partnership with Japan's Sumitomo Mitsui Banking Corp (SMBC), as it looks to tap into the dealmaking market in the country.

The companies said on Thursday they have worked together on cross-border mergers and acquisitions, healthcare and leveraged finance since 2021.

U.S. investment banks have been sharpening their focus on Canada, which offers a competitive advantage.

Easing wage inflation and potential interest rate cuts in Canada are expected to boost mergers and acquisitions (M&A) in 2024, analysts have said.

SMBC and Jefferies, which set up an investment banking unit in Canada a few months ago, have been strengthening their partnership.

Last year, the Japanese firm boosted its U.S. presence by combining its U.S. equity and M&A business with Jefferies. The deal also included SMBC's parent, Sumitomo Mitsui Financial Group ( SMFG ), increasing its stake in the U.S. investment bank.

In January, the two companies extended their alliance in the Europe, the Middle East and Africa (EMEA) markets.

(Reporting by Pritam Biswas in Bengaluru; Editing by Shinjini Ganguli)