Japan Macro Weekly

The report highlights a hawkish pivot within the Bank of Japan, with forecasts indicating steady 0.25ppt rate hikes toward a 2% neutral rate. Despite currency weakness, the outlook for Japan's economy remains stable with gradual inflation acceleration expected.

Key Takeaways

• 1.The Bank of Japan (BOJ) has shown a hawkish shift with most members now focusing on upside inflation risks, despite having recently raised the policy rate to 1.0%.
• 2.Mizuho forecasts the BOJ will continue raising rates once every six months, reaching 1.25% in December 2026 and 1.50% by June 2027.
• 3.Tokyo CPI data showed acceleration in June (headline +1.7%), though some indicators were influenced by technical factors like water charge base effects.

Table of Contents

• Review of key indicators and events
• BOJ-related events
• Economic outlook (as of 29 June)
• Comments on domestic rates outlook
• Important Disclosure Information
• Analyst Certification
• Disclaimer

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