Japan Macro Weekly

Japan's 1Q 2026 GDP grew a stronger-than-expected 0.5% QoQ, and while April CPI slowed to 1.4%, Mizuho forecasts a BOJ rate hike to 1.0% in June. The report projects a terminal policy rate of 1.5% despite geopolitical risks in the Middle East and domestic political opposition.

Key Takeaways

• 1.The Japanese economy showed resilience in 1Q 2026 with real GDP growing 0.5% QoQ (2.1% annualized), beating market expectations driven by private consumption and exports.
• 2.Mizuho's baseline scenario forecasts a Bank of Japan (BOJ) policy rate hike to 1.0% at the June meeting, despite potential political hurdles from the Takaichi administration.
• 3.Inflation (CPI) slowed to 1.4% in April due to government subsidies and lower food prices, but energy-driven inflationary pressure is expected to return in the second half of 2026.

Table of Contents

• Review of key indicators and events
• Economic indicators
• BOJ-related events
• Economic outlook (as of 25 May)
• Important Disclosure Information
• Analyst Certification
• Disclaimer

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