From Tokyo to Wall Street! With the help of the new policies of Tokyo City and the interest rate cuts by the Federal Reserve, Mizuho plans to expand its investment banking business.

The CEO of Mizuho Financial Group, a Japanese financial giant, expressed optimism in a media interview, stating that under the largest fiscal stimulus in Japan in recent years led by the new Prime Minister Kaneshisa Sanae and the interest rate cut cycle by the Federal Reserve, he believed that the momentum of Mizuho's investment banking business would continue to be strong in both the Japanese domestic market and in the American market where the third largest Japanese lender is accelerating its expansion. Mizuho's CEO, Masahiro Kihara, stated in a media interview on Thursday that the Tokyo-based Mizuho has completed the acquisition and integration of the US boutique investment bank Greenhill & Co., which was acquired by Mizuho two years ago and is now beginning to reap the benefits of the integration. "We are now able to pursue large-scale M&A transactions again," he said in the interview. Kihara stated that the overnight rate cut by the Federal Reserve would have a very positive impact on Mizuho's business lines in the US market. "This growth momentum may continue, which is very favorable for us." He expected the Fed to cut rates two to three more times in 2026, rather than just once as shown in the latest FOMC dot plot for 2026. Fed Chair Powell's post-monetary policy statement did not send out strong hawkish signals that the market had been worrying about, and the unexpected announcement of the purchase of short-term US bonds caused a significant weakening of the US dollar index. Many Wall Street analysts referred to the results of this monetary policy meeting and Powell's latest comments as a "just right" neutral result, providing greater operating space for Asian central bank monetary policies and reducing the pressure of USD financing costs. In recent years, Mizuho's CEO Kihara has repeatedly stated that Mizuho is committed to becoming the top investment bank in Asia and globally. According to the latest compiled statistics from the institution, Mizuho ranks 22nd among global M&A advisory firms this year, with key core M&A deals including the $9.4 billion acquisition agreement by 3G Capital to acquire shoe manufacturer Skechers USA Inc. Mizuho's investment banking department ranks seventh in the Japanese M&A market, which is currently at the second highest level in history. Kihara stated that the market transactions in Japan have been driven by a change in the mindset and thinking of CEOs, who are aiming to significantly increase shareholder returns, especially in mega-cap companies. This trend is now spreading to mid-cap companies, and Mizuho has strengthened its capabilities in this area, as stated in the interview. Several of Japan's largest commercial banks are expected to enjoy another record year of profits, mainly due to the relatively high benchmark interest rates in Japan since the start of the BOJ's rate hike cycle, which has raised income from loan transactions, while various tariff data did not pose significant obstacles to operations. Mizuho raised its full-year profit forecast in November, marking the second profit upgrade for the fiscal year ending in March next year. The driving force behind the strong rise in the Tokyo Stock Exchange is the strong shareholder return growth measures and the combined push of the BOJ rate hike cycle, with Mizuho's stock price soaring 46% year to date. Kihara stated that the new Prime Minister Kaneshisa Sanae intends to further boost Japan's economic growth, making the path of Japan's economic growth clearer. Kaneshisa recently launched the country's largest round of fiscal spending since the relaxation of global COVID-19 restrictions, intensifying market concerns about Japan's rapidly growing public debt. Japanese government bonds have fallen sharply this year, especially as long-term JGB yields have risen to their highest levels in decades, but the Japanese stock market, especially financial stocks, continues to hit new highs under the stimulus of strong fiscal stimulus. However, Kihara stated that as long as the Japanese government maintains appropriate fiscal discipline, he does not believe that there will be any negative impact. He stated that the yield on 10-year Japanese government bonds may briefly exceed 2% - a level that has not been reached in 19 years, but is expected to remain within a relatively low historical range. Kihara expects the BOJ to hike rates this month, which is broadly in line with market expectations. Even if the BOJ raises rates again next year, he does not expect the yen exchange rate to continue to appreciate significantly. He stated that the strength of the yen against the dollar may fluctuate between 145 and 150 yen. On Thursday morning, in the Tokyo market, the USD/JPY exchange rate was 155.64. Kihara also mentioned Mizuho's continued expansion plans in the Indian and Chinese markets. He stated that Mizuho is still in negotiations to acquire a stake in the renowned investment bank Avendus Capital Pvt. based in Mumbai, and hopes to achieve positive results early next year. Kihara also stated that Mizuho intends to increase its presence in the Chinese market and will initially focus on the debt capital markets. The company's securities subsidiary was approved by regulatory authorities in September and plans to establish a wholly-owned securities firm in China, hiring a former head of China operations at Daiwa Securities to lead the entity. "It's a challenge, but I think it's worth doing," he said in the interview.