Japan's Two-Year Swap Rates Are `Too Low' Given BOJ Outlook, Mizuho Says

(Bloomberg) -- Japan's two-year swap rates are ``too low'' given that the central bank may raise borrowing costs as early as August, Mizuho Investors Securities Co. said.

Two-year swap rates may climb to 1.1 percent by August, the highest since 1997, as consumer spending helps the economy sustain its longest postwar expansion, said Akihiko Inoue, a Tokyo-based market analyst at Mizuho. The median forecast of 40 economists surveyed by Bloomberg News this month showed the central bank may raise rates to 0.75 percent from 0.5 percent in September.


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