Japan Economist, Japan Macro Advisors

Takuji Okubo

Japan Economist

Concise and Insightful Analysis on Japan Economy

Japan Macro Advisors

Our mission is to provide a concise and timely analysis on the Japanese economy for the benefit of global audiences. Communication, especially in foreign languages, has always been a weakness for the Japanese, which was fine when Japan's economic might attracted foreign media and various other institutions to study and report on Japan - such days are long gone. In the last two decades, we saw foreign institutions reallocating their resources from Japan to other more exciting parts of the world. As a result, when we read reporting on Japan in foreign media, we sense a subtle but noticeable decline in the depth of understanding what is actually happening in Japan.

Macroeconomics

<ul>
<li>BoJ Ueda acknowledges that "behind the curve" is now a genuine risk BoJ need to watch out for. The cost of patience is rising.</li>
<li>Trend inflation is already approaching 2% now, rather than in 2027. The April Outlook Report shifts to declarative language — "underlying CPI inflation has been approaching 2 percent" </li>
<li>October 2026 remains our central scenario, but June is live. Board member Kazuyuki Masu may provide a pivotal vote in June. His scheduled speech on May 14 is worth attention. </li>
</ul>


BoJ Ueda acknowledges that "behind the curve" is now a genuine risk BoJ need to watch out for. The cost of patience is rising.
Trend inflation is already approaching 2% now, rather than in 2027. The April Outlook Report shifts to declarative language — "underlying CPI inflation has been approaching 2 percent" 
October 2026 remains our central scenario, but June is live. Board member Kazuyuki Masu may provide a pivotal vote in June. His scheduled speech on May 14 is worth attention. 


Behind the Curve Is A Real Risk for the BoJ

<ul>
<li>
April hike ruled out, July now conditional. Governor Ueda's cautious tone and absence of forward guidance indicates that BoJ can remain on sideline for a while.</li>
<li>
Ueda puts FX markets on notice. His repeated acknowledgment of yen weakness is a deliberate reminder that a rate hike remains as a tool to counter further yen depreciation.</li>
<li>
Middle East uncertainty is a bigger than tariff risk. A war is inherently uncontrollable —an extended hold well into 2027 cannot be ruled out if global recession risk materialises.</li>
</ul>



April hike ruled out, July now conditional. Governor Ueda's cautious tone and absence of forward guidance indicates that BoJ can remain on sideline for a while.

Ueda puts FX markets on notice. His repeated acknowledgment of yen weakness is a deliberate reminder that a rate hike remains as a tool to counter further yen depreciation.

Middle East uncertainty is a bigger than tariff risk. A war is inherently uncontrollable —an extended hold well into 2027 cannot be ruled out if global recession risk materialises.


Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Cross Asset Strategy

<ul>
<li>Concerns continue about future Japanese fiscal policy conduct after the 8 February election. The BoJ has recently upgraded its growth and inflation outlooks, thereby providing justification for continued policy normalisation.</li>
<li>The current level of yen undervaluation significantly exceeds what prevailed during Plaza Accord's formulation, but the political desire in Japan to boost the yen versus the US dollar is low.</li>
<li>Gradual monetary policy normalisation will prolong the yen carry trade in the short term, but the BoJ's benign tolerance of excessive yen liquidity is likely to wane over time.</li>
</ul>


Concerns continue about future Japanese fiscal policy conduct after the 8 February election. The BoJ has recently upgraded its growth and inflation outlooks, thereby providing justification for continued policy normalisation.
The current level of yen undervaluation significantly exceeds what prevailed during Plaza Accord's formulation, but the political desire in Japan to boost the yen versus the US dollar is low.
Gradual monetary policy normalisation will prolong the yen carry trade in the short term, but the BoJ's benign tolerance of excessive yen liquidity is likely to wane over time.


Weak Yen Prolongs Carry Trade, but BoJ's Tolerance of Excessive Liquidity Will Wane

<ul>
<li>BoJ signals rising confidence in achieving 2% trend inflation in 2027, reinforcing expectations of continued rate normalization toward a 1.5% terminal policy rate. </li>
<li>US trade policy no longer a source of "high uncertainty". Repeated acknowledgment of yen weakness suggests FX dynamics could influence the timing of BoJ rate hikes.</li>
<li>BoJ views JGB market intervention as a last resort, placing primary responsibility on the government to stabilize the super-long sector through fiscal discipline and issuance policy adjustments.</li>
</ul>


BoJ signals rising confidence in achieving 2% trend inflation in 2027, reinforcing expectations of continued rate normalization toward a 1.5% terminal policy rate. 
US trade policy no longer a source of "high uncertainty". Repeated acknowledgment of yen weakness suggests FX dynamics could influence the timing of BoJ rate hikes.
BoJ views JGB market intervention as a last resort, placing primary responsibility on the government to stabilize the super-long sector through fiscal discipline and issuance policy adjustments.


Bond Market Intervention Is a Last Resort for the BoJ

<ul>
<li>BoJ signals that the next hike will not be the last, with Governor Ueda hinting that policy rates will continue to rise as long as the current economic outlook holds.</li>
<li>Yen weakness and fiscal easing are emerging concerns for the BoJ, potentially keeping inflation elevated and increasing the risk of a faster tightening cycle.</li>
<li>October 2026 remains our baseline for the next hike. Risks are skewed toward an earlier move though, as soon as July 2026. </li>
</ul>


BoJ signals that the next hike will not be the last, with Governor Ueda hinting that policy rates will continue to rise as long as the current economic outlook holds.
Yen weakness and fiscal easing are emerging concerns for the BoJ, potentially keeping inflation elevated and increasing the risk of a faster tightening cycle.
October 2026 remains our baseline for the next hike. Risks are skewed toward an earlier move though, as soon as July 2026. 


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Japan Treasury (JAPAN GOVT)

Behind the Curve Is A Real Risk for the BoJ

BoJ gov. Ueda admits BoJ is facing a behind-the-curve risk. Trend inflation approaching 2% now, not 2027. June hike is live. Watch Masu's May 14...

Takuji Okubo

Bank of Japan: Patience Is the Virtue

Governor Ueda's cautious approach rules out April hike. His repeated mention of yen weakness is a warning for FX market. Middle East war can be a...

Takuji Okubo

Weak Yen Prolongs Carry Trade, but BoJ's Tolerance of Excessive Liquidity Will Wane

Concerns linger over Japanese fiscal policy conduct. A weak yen has prolonged the carry trade. The BoJ's tolerance of excessive liquidity will be...

DeSaque Macro Research

Bond Market Intervention Is a Last Resort for the BoJ

BoJ more confident in reaching 2% inflation, hinting faster rate hikes. On bond market turmoil, he hints that the government—not the BoJ—should...

Takuji Okubo

More Hikes to Come in 2026-2027

BoJ signals that the next hike will not be the last. Yen weakness and fiscal easing are emerging concerns for the BoJ. The risks are sooner and...

Takuji Okubo

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Behind the Curve Is A Real Risk for the BoJ

BoJ gov. Ueda admits BoJ is facing a behind-the-curve risk. Trend inflation approaching 2% now, not 2027. June hike is live. Watch Masu's May 14...

Takuji Okubo

Bank of Japan: Patience Is the Virtue

​Governor Ueda's cautious approach rules out April hike. His repeated mention of yen weakness is a warning for FX market. Middle East war can be a...

Takuji Okubo

Weak Yen Prolongs Carry Trade, but BoJ's Tolerance of Excessive Liquidity Will Wane

Concerns linger over Japanese fiscal policy conduct. A weak yen has prolonged the carry trade. The BoJ's tolerance of excessive liquidity will be...

DeSaque Macro Research

Bond Market Intervention Is a Last Resort for the BoJ

BoJ more confident in reaching 2% inflation, hinting faster rate hikes. On bond market turmoil, he hints that the government—not the BoJ—should...

Takuji Okubo

More Hikes to Come in 2026-2027

BoJ signals that the next hike will not be the last. Yen weakness and fiscal easing are emerging concerns for the BoJ. The risks are sooner and...

Takuji Okubo

Governor Ueda's cautious approach rules out April hike. His repeated mention of yen weakness is a warning for FX market. Middle East war can be a...