G4 Rates and FX Monthly

The Mizuho June 2026 report highlights a global economy strained by the US-Iran conflict and a closed Strait of Hormuz, forcing central banks like the ECB and BoE into inflation-fighting rate hikes despite slowing growth.

Key Takeaways

• 1.The closure of the Strait of Hormuz due to the US-Iran conflict is a dominant terms-of-trade shock for Europe and the UK, driving inflation risks higher.
• 2.Despite growth concerns, G4 central banks (ECB, BoE, BoJ) are shifting hawkish to combat rising inflation, with several rate hikes expected through year-end 2026.
• 3.The US economy remains resilient due to the AI investment cycle, fiscal spending, and energy independence, shielding it from the immediate energy shock affecting Europe.

Table of Contents

• The Background
• The View
• USD
• EUR Rates
• EUR FX
• GBP
• JPY
• XCCY
• The view in full
• EUR Policy
• USD Policy
• USD Rates
• USD FX
• GBP Policy
• GBP Rates
• GBP FX
• JPY Policy
• JPY Rates
• JPY FX
• Mizuho Key Forecasts
• Important Information