Macro Weekly

Mizuho’s Macro Weekly outlook expects the BOJ to pursue a steady, gradual rate hike path to 1.5% by June 2027. Despite persistent market concerns, the firm views current bond market pricing of a 2% terminal rate as excessive.

Key Takeaways

• 1.The Bank of Japan is expected to continue raising rates gradually, aiming for a 1.25% policy rate by December 2026 and 1.50% by June 2027.
• 2.Current bond market expectations of a 2% terminal rate are viewed as excessive compared to the author's 1.5% terminal rate forecast.
• 3.Geopolitical risks in the Middle East have subsided following a US-Iran framework agreement, reducing pressure for urgent/accelerated BOJ tightening.

Table of Contents

• Review of key indicators and events
• Economic indicators
• BOJ-related events
• Economic outlook (as of 13 July)
• Comments on real GDP outlook
• Comments on CPI outlook
• Comments on domestic rates outlook
• Important Disclosure Information
• Analyst Certification
• Disclaimer

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