Mizuho flags BOJ potential September hike, faster adjustments
Mizuho Global Markets’ co-head says the Bank of Japan could hike as soon as September and shift policy updates from roughly every six months to quarterly, with two hikes before year-end to a 1.5% policy rate.
Mizuho Global Markets co-head said the Bank of Japan could hike as soon as September and may raise the frequency of policy adjustments from roughly every six months to quarterly. 5%. Markets price a 78% chance of a Sept. 18 hike.
Mizuho will keep a conservative JGB strategy, focusing on inflation-linked bonds and short-dated paper. The 10-year JGB yield has climbed to a 30-year high but remains below Japan's roughly 4% nominal growth; global structural shifts and investment growth could push Japan's neutral rate higher and inflation risks are skewed to the upside. -Japan joint intervention signals both sides oppose further yen depreciation, though the currency's weakness partly reflects BOJ easing. Mizuho views Japan as undergoing a multi-decade economic transformation; equities remain attractive but market volatility may increase.