Macro Weekly

Latest edition · August 31, 2026

Japan Macro | Macro Weekly

Mizuho Securities projects the Bank of Japan will implement a rate hike in September 2026, reaching a terminal rate of 1.75% by June 2027. August Tokyo CPI data and hawkish BOJ commentary support ongoing tightening while market pricing beyond 2% appears excessive.

In this Macro Weekly report, Mizuho Securities reviews Japanese inflation developments and the Bank of Japan's rate path outlook following Tokyo's August CPI print (core-core at +2.0% YoY) and Deputy Governor Himino's hawkish remarks. Mizuho maintains a baseline forecast of a 25bp BOJ rate hike in September 2026, followed by two additional hikes in January and June 2027 to reach a 1.75% terminal rate. With the market pricing terminal rates above 2%, Mizuho expects modest yield gains across the JGB curve before yields decline sustainably around mid-2027. USD/JPY is projected to trade near 150 over the medium term.

Key takeaways from the latest edition

• 1.Mizuho's baseline scenario expects a BOJ rate hike in September 2026, followed by 25bp rate hikes in January and June 2027 to reach a terminal policy rate of 1.75%.
• 2.August Tokyo CPI showed headline inflation accelerating to +1.9% YoY and core-core CPI accelerating to +2.0% YoY, reflecting underlying price pressures alongside rising service prices.
• 3.Current market terminal rate expectations exceeding 2% are considered excessive; short-to-long JGB yields are likely to see only modest increases before entering a sustained decline around mid-2027.

What this series covers

• Global economy and finance: Weekly watch (31 August)
• Review of key indicators and events
• 24–30 August: Events ranked from ※ to ※※※ in ascending order of interest
• Economic indicators
• BOJ-related events
• Economic outlook (as of 31 August)
• Comments on real GDP outlook
• Comments on CPI outlook
• Comments on domestic rates outlook
• Important Disclosure Information
• Analyst Certification
• Disclaimer

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