BOJ Research Justifying Rate Hikes Amid Low Inflation

Mizuho evaluates recent BOJ research indicating that 'underlying' inflation is near the 2% target, which may justify further rate hikes despite Tokyo headline CPI dropping to 1.5%.

Key Takeaways

• 1.The Bank of Japan (BOJ) is shifting focus to 'underlying' inflation metrics, which may justify rate hikes even if headline CPI stays below 2%.
• 2.Tokyo's headline CPI for January 2026 slowed to 1.5%, falling below the BOJ target for the first time since late 2024.
• 3.A BOJ working paper suggests that 'trend inflation' has risen since 2022 and currently remains close to the 2% target.

Table of Contents

• Macro Information
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• Analyst Certification
• Disclaimer

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