Global Economy & Finance: Mizuho Weekly Watch on BOJ Rate Hikes and Tokyo CPI

Mizuho Securities projects the Bank of Japan will implement a rate hike in September 2026, reaching a terminal rate of 1.75% by June 2027. August Tokyo CPI data and hawkish BOJ commentary support ongoing tightening while market pricing beyond 2% appears excessive.

Key Takeaways

• 1.Mizuho's baseline scenario expects a BOJ rate hike in September 2026, followed by 25bp rate hikes in January and June 2027 to reach a terminal policy rate of 1.75%.
• 2.August Tokyo CPI showed headline inflation accelerating to +1.9% YoY and core-core CPI accelerating to +2.0% YoY, reflecting underlying price pressures alongside rising service prices.
• 3.Current market terminal rate expectations exceeding 2% are considered excessive; short-to-long JGB yields are likely to see only modest increases before entering a sustained decline around mid-2027.

Table of Contents

• Global economy and finance: Weekly watch (31 August)
• Review of key indicators and events
• 24–30 August: Events ranked from ※ to ※※※ in ascending order of interest
• Economic indicators
• BOJ-related events
• Economic outlook (as of 31 August)
• Comments on real GDP outlook
• Comments on CPI outlook
• Comments on domestic rates outlook
• Important Disclosure Information
• Analyst Certification
• Disclaimer

Report data

Chart 2. Macro team forecasts for financial and forex markets — as of August 31, 2026.

Reports in this series

Macro Weekly is shown in chronological order through this edition, published on August 31, 2026.

Part of the Macro Weekly series — view all 5 editions

1. Jun 2Japan Macro (1)
2. Jul 13Japan Macro
3. Aug 10Japan Macro aug 10
4. Aug 17Japan Macro Weekly

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