Mizuho Rates Strategy Weekly: BOJ Seen Moving Up Timing of Next Rate Hike

Mizuho has brought forward its BOJ rate hike forecast to September 2026 (to 1.25%), with a terminal rate expectation of 1.50% by March 2027 driven by persistent yen weakness and hawkish MPM communications. In rates strategy, Mizuho initiated a 10s30s OIS steepener while maintaining existing OIS and ASW positions.

Key Takeaways

• 1.Mizuho revised its baseline scenario to expect the next Bank of Japan (BOJ) rate hike to come in September 2026 to 1.25%, followed by a hike to 1.50% in March 2027, which marks the expected terminal rate.
• 2.The BOJ's July Monetary Policy Meeting Summary of Opinions and subsequent media reports indicate a hawkish shift and increased willingness to accelerate tightening to address yen weakness.
• 3.JGB yields are expected to remain elevated through Q3 2026 before declining moderately in Q4 2026 and dropping in earnest in Q2 2027 as the market prices in the end of rate hikes.

Table of Contents

• (1) BOJ seen moving up timing of next rate hike
• HAWKISH SUMMARY OF OPINIONS FOR JULY MPM
• NEWS REPORTS ON BOJ; UPDATE TO OUR MONETARY POLICY OUTLOOK
• DEVELOPMENTS THIS WEEK AND IMPLICATIONS FOR RATES OUTLOOK
• SHORT-TERM OUTLOOK (ONE WEEK – ONE MONTH)
• MEDIUM-TERM OUTLOOK (SEVERAL MONTHS – ONE YEAR)
• Risk scenarios
• (1) Envisaged timetable for BOJ JGB-buying operations
• (2) Yen rates relative value and investment strategies
• INVESTMENT STRATEGIES
• RELATIVE VALUE SCORE TABLES

Report data

Chart 1.2. Quarterly forecasts (base-case scenario) — as of August 13, 2026.

Reports in this series

Rates Strategy Weekly is shown in chronological order through this edition, published on August 17, 2026.

Part of the Rates Strategy Weekly series — view all 15 editions

Looking for the latest edition? JGB Strategy | Strategy Weekly (Aug 31, 2026)

1. May 25JGB Strategy
2. Jun 1JGB Strategy
3. Jun 2JGB Strategy
4. Jun 8JGB Strategy
5. Jun 9Mizuho Fixed Income Japan Rates Strategy Weekly "Ueda’s speech and BOJ-related reports
6. Jun 10Mizuho Fixed Income Rates Strategy Weekly Japan Ueda’s speech and BOJ-related reports
7. Jun 15JGB Strategy
8. Jun 22Mizuho Fixed Income Japan Rates Strategy Weekly "June MPM gives no need to revise market expectations
9. Jun 29JGB Strategy
10. Jul 6JGB Strategy
11. Jul 13JGB Strategy
12. Aug 10JGB Strategy aug 10

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