Japan Focus of the Week

Goldman Sachs anticipates a June 2026 rate hike by the Bank of Japan following hawkish signals from Governor Ueda. Additionally, the firm expects a downward revision to Japan's Q1 GDP growth.

Key Takeaways

• 1.Goldman Sachs now expects the Bank of Japan to raise interest rates in June, anticipating a more hawkish policy stance.
• 2.Q1 2026 GDP real growth is expected to be revised downwards to +1.6% qoq annualized, driven by lower capex figures.
• 3.Japan's long-term debt/GDP ratio sustainability is increasingly threatened by high market interest rates, which could pull forward the inflection point where debt begins to rise.

Table of Contents

• Focus Next Week
• This Week's Main Research
• This Week's Data and Events
• Upcoming Economic Indicators and Events (June 8 - 12)
• Rising Interest Rates Pull Forward the Inflection Point in the Public Debt / GDP Ratio
• BOJ: Now Expecting Next Rate Hike at June MPM Following Governor Ueda's (June 3) Speech
• This Week's Recap: Economic Events and Data
• April Wages: Basic Wage Increases Stably; Real Wages Positive for Fourth Consecutive Month
• Reference: Japan One Month Economic Calendar
• Disclosure Appendix