Report published September 28, 2026
Global Economy and Finance: Weekly Watch – Mizuho Securities Macro Outlook
Mizuho Securities · September 28, 2026
Mizuho Securities projects the Japanese economy will grow at 0.9% in FY2026 and FY2027 as resilient AI demand and capital spending counterbalance oil-driven inflation. The BOJ is expected to hike rates to a terminal rate of 1.75% by mid-2027, suggesting market pricing in the mid-2% range is excessive.
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Finvaulta summarizes Mizuho Securities's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.The Bank of Japan is projected to raise its policy rate to a terminal rate of 1.75% via 25bp hikes in January and June 2027, with risks skewed to the upside.
- 2.The market's pricing of mid-2% terminal rates is viewed as excessive, but short- and medium-term JGB yields are unlikely to see a sustained decline until 2H 2027.
- 3.Japanese economic growth is expected to remain slightly above potential (0.9% in FY2026 and FY2027), supported by resilient capex and AI-related demand despite crude oil inflation headwinds.
Table of Contents
- Review of key indicators and events
- Economic outlook (as of 28 September)
- Comments on real GDP outlook
- Comments on CPI outlook
- Comments on domestic rates outlook
Report data
Chart 2. Macro team forecasts for financial and forex markets — as of September 28, 2026.
| Metric | Estimate | Context |
|---|---|---|
| 10-Year JGB Yield | 3.115% | Highest level reached since August 1996 amid rising global yields. |
| USD/JPY Exchange Rate | 159.0 JPY per USD | Briefly climbed above 159 before falling back on reports of bilateral finance discussions. |
| BOJ Policy Rate (Current) | 1.25% | Uncollateralized call O/N rate forecast for Oct-Dec 2026. |
| BOJ Terminal Policy Rate Forecast | 1.75% | Projected terminal policy rate for the tightening cycle, reached via hikes in Jan 2027 and Jun 2027. |
| Japan Real GDP Growth (FY2026) | 0.9% | Mizuho macro team forecast for Japanese FY2026 real GDP growth. |
Reports in this series
Macro Weekly is shown in chronological order through this edition, published on September 28, 2026.
Part of the Macro Weekly series — view all 8 editions
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- Aug 10Japan Macro aug 10
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