Mizuho CEO Masahiro Kihara Urges BOJ to Consider Outsized Interest-Rate Hike

Mizuho Financial Group CEO Masahiro Kihara said the Bank of Japan may need to consider a larger-than-usual interest-rate increase to help contain inflation, signaling a more forceful approach than the central bank has used in decades, according to Bloomberg. The remarks come as Kihara also expects the BOJ to raise rates in June or July, reflecting a broad view that Japan’s long era of ultra-loose policy is moving further toward normalization.

Bloomberg reported that Kihara floated the idea of an outsized hike as a way to support market stability and address inflation pressures. The suggestion is notable because the BOJ has not made such a move since the aftermath of Japan’s asset bubble era in 1990, underscoring how unusual a step this would be in the current policy environment.

Kihara’s comments add to growing attention on the BOJ’s next decision at a time when investors are watching for signs of how quickly policymakers are prepared to tighten. In a separate Bloomberg video interview, he said he expects the central bank to act in the summer months and discussed the outlook for Mizuho’s business, with the bank forecasting another year of profit growth.

For Japanese lenders, higher interest rates generally improve the environment for lending margins after years of compressed returns under near-zero rates. That makes the BOJ’s path especially important for banks such as Mizuho, which have been positioning for a gradual shift in policy as inflation has remained above the levels seen during much of the post-bubble period.

The comments also highlight a broader debate over how far and how fast the BOJ should move. A larger hike could reinforce the message that policymakers are serious about fighting inflation, but it would also mark a sharper break from the cautious pace that has characterized Japan’s monetary policy for years.

What happens next depends on the BOJ’s upcoming meetings and whether economic data continue to support tighter policy. Kihara’s remarks suggest market participants should be prepared for a more decisive move than many have expected, even as the central bank remains focused on balancing inflation control with financial stability.