Japan Economic and Financial Weekly

JGB yields are rising as investors demand higher risk premia amid inflation volatility and a weak yen, making a BoJ rate hike in June 2026 increasingly likely.

Key Takeaways

• 1.JGB yields are facing upward pressure as investors demand a higher risk premium due to inflation uncertainty driven by high oil prices and a weak yen.
• 2.The Bank of Japan (BoJ) is increasingly likely to raise interest rates at its June 15-16 meeting as a preemptive response to upside inflation risks.
• 3.The 10-year JGB yield is forecasted to trade between 2.600% and 2.800%, while the 30-year yield is seen between 3.800% and 4.050%.

Table of Contents

• JGB yield scenario for May 18-22
• Key events for the week of May 18
• BoJ watch: Growing likelihood of June rate hike
• Summary of Opinions for April MPM highlights concerns about upside risks to prices
• Board member Kazuyuki Masu indicates support for rate hike
• Will preemptive response to upside price risks be cited as reason for June rate hike?
• Economic indicators for the week of May 18
• Japan Economic Outlook
• Market Forecast
• Analyst Certification
• Disclosures
• Disclaimers

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