The CEO of Mizuho Financial Group stated that more decisive interest rate increases by the Bank of Japan could be more beneficial for the country's bond market.

In a media interview on Wednesday, Masahiro Kihara expressed expectations that the Bank of Japan would raise interest rates in June or July to address inflation. He noted that unless the rate hike is substantial, the act of raising rates itself might have limited impact on the market.

"If they take bolder action, such as a 50 basis point hike at once, it might be more favorable for the bond market," he said. When asked if the central bank was "behind the curve," Kihara responded that it was a "difficult question, and I think to some extent, yes."

Despite concerns that Middle East conflicts could hinder Japan's economic recovery, investors still anticipate the Bank of Japan will raise rates as early as June. Driven by inflation worries stemming from the Iran conflict and uncertainties over fiscal policy, Japanese government bond yields have risen significantly in recent weeks.