Japan Will See Downward Pressure on Inflation Going Forward, Says BOFAML’s Devalier

The video discusses the challenges faced by Japan's economy, focusing on the volatility of CPI numbers and the BOJ's struggle to manage inflation with ultra-low interest rates. It highlights the need for fiscal policy support, which is currently lacking, and the impact of global economic uncertainty, such as trade wars, on Japan's growth. The BOJ's limited ability to stimulate demand through monetary policy alone is emphasized, along with the need for coordinated fiscal efforts.

What are some factors contributing to the potential deflationary shocks in Japan?

• Increase in hotel fees

• Cuts in wireless service fees

• Decrease in FX rates

• Rise in overseas package tours

Why is the Bank of Japan struggling to stimulate demand?

• Excessive government spending

• High interest rates

• Strong economic growth

• Lack of fiscal policy support

What is the main issue with Japan's ultra-low interest rates?

• They are not supported by fiscal policy

• They are causing inflation to rise

• They have become ineffective over time

• They are too high to stimulate demand

What global issue is affecting Japan's economic growth?

• Decreasing population

• Technological advancements

• Rising oil prices

• Trade wars

What is the Bank of Japan's limitation in addressing global economic uncertainties?

• Inability to change interest rates

• Lack of monetary policy tools

• Excessive focus on exports

• Limited influence on private sentiment