In view of ongoing inflation and yen weakness, Mizuho Financial Group’s, the Bank of Japan could raise key interest rates again in March and up to three times this year.

With the yen weakening and inflation exceeding the BOJ’s target, “we can expect as many as three rate hikes this year, and it’s entirely possible that the next one could come as early as March or April,” said global markets co-head Kenya Koshimizu.

Koshimizu noted that Prime Minister Sanae Takaichi’s clearer policy stance and 3-4% nominal economic growth are beneficial aspects.

“The BOJ will adjust monetary policy in line with these improvements,” he added.

After global trade tensions eased, the BOJ lifted its policy rate to a 30-year high of ​0.75% in December, signaling its willingness for further rate hikes.

Despite recent government bond selloffs, Koshimizu defended current bond yields, stating that a 10-year yield of 2% is expected in an era of 3%-4% nominal economic growth. He claimed it might rise more without being out of line.