Mizuho Financial Group, Inc. MFG

The business

Mizuho is one of three Japanese megabanks alongside Mitsubishi UFJ (8306) and Sumitomo Mitsui (8316), running five segments: Retail & Business Banking, Corporate & Institutional, Global Corporate, Global Markets, and Asset Management. The franchise lives in the domestic banking book: a deposit base funded near zero for thirty years that now reprices as the Bank of Japan lifts rates. Net interest income did most of the work in the last year. It rose ¥415B to ¥1.46T in FY3/2026, roughly three-quarters of the ¥557B gain in consolidated gross profits, with fee income from securities and asset management carrying the rest. The clean segment profit split below the group total was not in the materials I pulled, so the concentration is expressed through the net-interest-income swing, which is where the rate sensitivity sits.

What the financials do not show is the rate backdrop driving all of this. The BOJ raised its policy rate to 1.0% in June 2026, the highest since 1995, and held there at the July 30 meeting on an 8-to-1 vote. A July Reuters poll had 70% of economists seeing at least 1.50% by Q2 2027, and the 10-year JGB yield sits near 2.7%. Each further 25bp of policy rate feeds the domestic deposit-loan spread mechanically, independent of loan growth, which is why the group can guide record profits without a lending boom. The yen near a multi-decade low (¥157/USD) also flatters the overseas book in yen terms. Rate assumptions here are consensus, not my own; the thesis rides on the BOJ actually delivering the hiking path the market prices.