Japan bank outlook, Iran war impact, and BOJ policy (with Shery Ahn)

Masahiro Kihara, President and CEO of Mizuho Financial Group, discusses the bank's record profit forecast of ¥1.3 trillion despite Iran war uncertainty. The war is affecting Japan through higher energy prices and potential supply disruptions, with GDP growth expected to fall below 1%. He believes the BOJ should hike in June or July as core-core CPI is at 2.3%. He sees the Japanese stock market as 'a little bit overpriced' but corporate action momentum continues. Mizuho is expanding to Australia with 200-300 staff and spending about $1B annually on AI.

Yields up , medium term, interviewee explicit

explicit

NDX cautious up , short term, interviewee implicit

implicit

RUT

Oil sideways , short term, interviewee explicit

explicit

Metals

USD sideways , short term, gpt inferred

inferred

Mizuho 8.0
Investment Bank $2100.00B
Masahiro Kihara 8.5

Japan bank outlook, Iran war impact, and BOJ policy (with Shery Ahn)

dxy

Kihara's expectation of BOJ rate hikes in June/July would support the yen, potentially capping dollar strength in the near term.

5/12/2026 6:22:11 PM	short term down	5 days later	+0.50%	-0.50%
3/30/2026 10:20:35 PM	medium term up	20 days later	-1.91%	-1.91%
2/19/2026 2:30:40 PM	short term up	5 days later	-0.10%	-0.10%
10/13/2025 2:35:32 PM	short term cautious up	5 days later	-0.53%	-0.26%

ndx

Kihara notes the market is 'a little bit overpriced' but corporate action momentum continues based on AI. This suggests cautious optimism for tech-driven markets.

8/11/2025 11:39:22 PM	short term up	6 days later	-0.53%	-0.53%

wti

We expect the war will end somewhere around August and then it will get normal within six months or so.

4/30/2026 2:14:39 PM	short term sharp up	5 days later	-6.73%	-10.09%
4/16/2026 12:29:52 AM	medium term cautious up	20 days later	+13.07%	+6.54%

yields

If the BOJ moves boldly by 0.25% or 0.5%, that would be better for the bond market.

4/30/2026 2:14:39 PM	short term sharp up	5 days later	-0.50%	-0.75%
4/24/2026 7:01:32 PM	short term cautious up	7 days later	+2.54%	+1.27%
1/22/2026 10:28:03 AM	medium term up	20 days later	-3.18%	-3.18%
1/19/2026 5:42:31 AM	short term up	6 days later	-1.91%	-1.91%
12/19/2025 8:24:36 AM	medium term up	21 days later	+0.43%	+0.43%
12/11/2025 6:13:10 AM	medium term cautious up	21 days later	-0.17%	-0.08%
9/27/2025 1:39:47 AM	short term sharp up	7 days later	+0.51%	+0.76%

Show all yields results

Asks about Mizuho's higher dividend and ¥100B buyback as a sign of confidence to weather the Iran fallout.

Shery Ahn
Masahiro Kihara

Mizuho made good progress in four business areas. After-tax profit for FY2025 was ¥1.25 trillion, with basic earnings around ¥1.5 trillion. ¥1.3 trillion is a good target. However, there is uncertainty from the Middle East.

There is a bunch of global collaboration happening around the regions.
Asks about the channel through which uncertainty is being transmitted.

Shery Ahn
Masahiro Kihara

Energy prices are skyrocketing. There are supply disruptions for chemical products Japan imports. GDP growth projection of 1.2-1.3% will likely fall below 1%.

The government, refineries, and chemical companies are scrambling to secure supply. So far they are successful but the issue is more about price.
Asks if clients are being hurt and if this could affect Mizuho.

Shery Ahn
Masahiro Kihara

Corporate earnings will probably be affected. However, the momentum from before the war is continuing from a corporate action perspective. Many clients are pursuing M&A and investing for the future. If the war ends around August, normalization within six months is expected.

We believe and expect the war will end somewhere around August. It might be our hope.
Asks if the Japanese stock market is pricing in the potential fallout from the war.

Shery Ahn
Masahiro Kihara

The market is a little bit overpriced. However, corporate action is still there with many clients trying to improve returns and PBRs based on that momentum and AI.
Asks why the BOJ isn't hiking and if they should do it in June.

Shery Ahn
Masahiro Kihara

June or July should be a possibility. The last core-core CPI (excluding fresh food and energy) was 2.3% year-on-year. The BOJ is a little bit behind the curve. If they move boldly by 0.25% or 0.5%, that would be better for the bond market.

There is a possibility for rate normalization.
Asks about the government's new extra budget with no new bond issuance.

Shery Ahn
Masahiro Kihara

The government said they will use fiscal policy in a diligent manner. If they are not issuing new bonds, that means deleveraging, so they are going the right way.
Asks about Mizuho's AI spending compared to JPMorgan's $2 billion annually.

Shery Ahn
Masahiro Kihara

Mizuho is spending probably somewhere around half of JPMorgan's $2 billion from an investment and cost perspective.
Asks about expansion plans in Australia.

Shery Ahn
Masahiro Kihara

Mizuho is considering expanding to Australia with somewhere around 200-300 staff. Australia is a country where they can deploy the capability built in the US.

Japan-Australia relationship is very good.

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