Global Economy and Finance Weekly Watch

The Bank of Japan raised its policy rate to 1% while continuing to taper JGB purchases. Mizuho economists expect a terminal rate of 1.5% with further hikes occurring biannually.

Key Takeaways

• 1.The Bank of Japan (BOJ) raised its policy rate to 1.0%, the highest level in 31 years, signaling a shift toward normalizing interest rates.
• 2.Mizuho projects the BOJ will continue gradual rate hikes, targeting 1.25% by December 2026 and 1.50% by June 2027.
• 3.Inflation in Japan is expected to accelerate in 2H 2026, with core-core CPI returning to the 2.5–3.0% range between spring and autumn 2027.

Table of Contents

• Review of key indicators and events
• Economic indicators
• BOJ-related events
• Economic outlook (as of 22 June)
• Important Disclosure Information
• Analyst Certification
• Disclaimer

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