Keio University's Shirai on BOJ Policy Outlook

The video discusses the current inflation situation in Tokyo, primarily driven by food prices, and the pressure it places on the Bank of Japan (BOJ) to adjust its monetary policy. It explores the dynamics between supply-driven and demand-driven inflation, highlighting concerns about the sustainability of inflation above the BOJ's 2% target. Market participants anticipate potential changes in the BOJ's yield curve control (YCC) policy, while Governor Hueda emphasizes the importance of achieving stable inflation. The video concludes with speculation on the timing and nature of future BOJ policy adjustments.

What is the primary driver of the recent inflation in Tokyo?

• Transportation fees

• Food prices

• Technology prices

• Housing costs

Why is the current inflation in Japan considered not demand-driven?

• Because it is due to increased government spending

• Because it is driven by technological advancements

• Because it is primarily commodity-based

• Because it is mainly due to increased consumer spending

What is the BOJ's target inflation rate?

• 4%

• 2%

• 1%

• 3%

What is the market's expectation regarding BOJ's policy changes?

• That BOJ will decrease interest rates

• That BOJ will start tweaking YCC soon

• That BOJ will maintain the current policy indefinitely

• That BOJ will increase interest rates immediately

What is one reason the financial sector is pushing for BOJ to normalize its policy?

• To reduce unemployment rates

• To increase the value of the Yen

• To decrease inflation rates

• To increase liquidity in the government bond market

What is a potential sign of normalization in BOJ's policy?

• Increasing government spending

• Reducing the inflation target

• Raising the negative interest rate

• Expanding the 10-year yield target

What is a key challenge for BOJ in adjusting its monetary policy?

• Increasing the unemployment rate

• Decreasing the value of the Yen

• Achieving stable underlying inflation

• Reducing technological advancements