Macro Weekly

Mizuho analyzes the impact of the LDP's landslide election victory on Japanese fiscal and monetary policy, projecting a 1.00% terminal rate for the BOJ. The report warns that proposed consumption tax cuts could destabilize the JGB market if funding is not clearly secured.

Key Takeaways

• 1.The Liberal Democratic Party (LDP) secured a landslide victory in the Lower House election, winning 316 seats and achieving a two-thirds majority with its coalition partner.
• 2.Mizuho projects a BOJ terminal rate of 1.00%, expecting the market's current pricing of the upper 1% range to be excessive.
• 3.The Takaichi administration is pushing for a two-year consumption tax exemption on food and beverages, aiming to fund it without new bond issues.

Table of Contents

• Review of key indicators and events
• Economic indicators
• BOJ-related events
• Politics
• Economic outlook (as of 9 February)
• Important Disclosure Information
• Analyst Certification
• Disclaimer

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