Hello again, YCC?

Research evidence excerpt

Hello again, YCC?

18 June 2026

Mizuho Securities Equity Research Economics / Domestic and Overseas Economy

Economic Weekly

Japan's Economy: Weekly Newsletter (18 June 2026)

The press conference that we had all been eagerly awaiting passed withoutChief Economist:

delivering anything of real substance. While the BoJ’s monetary policy decisionShunsuke Kobayashi

was in line with prior media reports, there still appear to be several points of+81 3 6202 8222

shunsuke.kobayashi@mizuho-sc.com debate in terms of the Bank’s explanations regarding the background behind

its decision.

Economist:

Soichiro Hirose Looking back, we wonder if the logic that had been widely anticipated was

+81 3 6202 8293 as follows. Specifically, that the BoJ decided to raise interest rates in order to

soichiro.hirose@mizuho-sc.com respond to higher-than-expected CPI inflation driven by yen depreciation and

Economist: soaring energy resource prices. However, the Bank has stopped reducing its

Iichi Ogimi JGB purchases in order to show some consideration to the government, which

+81 3 6202 8599 is struggling in the face of surging JGB yields.

iichi.ogimi@mizuho-sc.com

As a result, a number of market participants were likely disappointed by the

BoJ’s monetary policy statement and press conference, which did not signal

a proactive stance toward the next rate hike. However, market participants’

underlying assumptions may have been mistaken in the first place. Looking

at the BoJ’s wording with an open mind, it can even seem as though we

may have put the horse before the cart—in other words, we can form a more

coherent understanding of the recent developments by viewing the end to JGB

purchase reductions as the starting point, and the rate hike as merely a move

that accompanied this.