Global Economy and Finance Weekly Watch

Mizuho analysts expect a June BOJ rate hike and a 1.5% terminal rate following a sharp rise in Japan's corporate inflation and hawkish central bank commentary. Domestic bond markets have reacted with 10-year yields reaching multi-decade highs.

Key Takeaways

• 1.The Bank of Japan (BOJ) is increasingly likely to raise rates in June 2026, driven by hawkish sentiment among board members and rising upside risks to inflation.
• 2.Japan's Corporate Goods Price Index (CGPI) surged to +4.9% YoY in April, the largest increase since May 2023, primarily due to higher energy costs and supply constraints.
• 3.Mizuho forecasts a terminal BOJ policy rate of 1.50%, reached via semi-annual hikes, though the Takaichi administration represents a potential hurdle.

Table of Contents

• Review of key indicators and events
• Economic indicators
• BOJ-related events
• Economic outlook (as of 18 May)
• Important Disclosure Information
• Analyst Certification
• Disclaimer

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