Rates Strategy Weekly

Mizuho maintains a hawkish outlook for the Bank of Japan, anticipating rate hikes in June and December. Concerns over potential consumption tax cuts without clear funding mechanisms pose additional risks to the bond market.

Key Takeaways

• 1.Despite some ambiguous language, a BOJ rate hike at the June Monetary Policy Meeting remains the baseline scenario.
• 2.Government proposals to cut the consumption tax on food without secured funding may increase fiscal pressure on the bond market.

Table of Contents

• Ueda's speech and BOJ-related reports
• Analyzing reports on consumption tax cut
• DEVELOPMENTS THIS WEEK AND IMPLICATIONS FOR RATES OUTLOOK
• SHORT-TERM OUTLOOK (ONE WEEK – ONE MONTH)
• MEDIUM-TERM OUTLOOK (SEVERAL MONTHS – ONE YEAR)
• Risk scenarios
• BOJ bond purchases in May (outstanding JGB holdings)
• Yen rates relative value and investment strategies