Japan Macro Update

The report analyzes the interplay between the Japanese government's fiscal stance, yen depreciation, and the BOJ's normalization path. Mizuho expects a measured half-yearly rate hike cadence to continue.

Key Takeaways

• 1.The Takaichi administration is showing a tacit acceptance of BOJ rate hikes to manage yen weakness.
• 2.The BOJ is expected to move toward a half-yearly rate hike cadence, targeting 1.25% in December 2026 and 1.50% in June 2027.

Table of Contents

• Takaichi administration might continue to tacitly accept rate hikes out of concern over risks to the yen (and JGBs)
• Reverting to a half-yearly rate hike cadence seen as consistent with the 'first pillar' perspective

Document Preview

Page 1 of 4

Subscribe for full accessStart Free Trial