BOJ’s Kuroda Says FX Rate Can Affect Inflation Rate

The video discusses the impact of exchange rates on inflation forecasts, emphasizing that while short-term fluctuations can affect inflation, the forecast is primarily based on labor market improvements and output gap. The central bank is confident in achieving a 2% inflation target by fiscal 2018, assuming stable exchange rates. The current monetary policy remains accommodative, with potential adjustments based on economic conditions.

What is the primary basis for the inflation forecast discussed in the video?

• Government fiscal policy

• Continuous improvement in the labor market and output gap

• Exchange rate stability

• International trade agreements

How does the central bank plan to achieve the 2% inflation target?

• By implementing strict trade policies

• By reducing government spending

• By assuming exchange rates will not fluctuate significantly

• By increasing interest rates

What could cause a delay in reaching the 2% inflation target?

• Appreciation of the exchange rate

• Depreciation of the exchange rate

• Increase in government debt

• Decrease in consumer spending

What is the current stance of the monetary policy as discussed in the video?

• Adopting a neutral policy

• Tightening the policy

• Maintaining an accommodative policy

• Implementing a restrictive policy

What is the expected trend for inflation according to the video?

• A gradual increase

• Stability with no change

• A rapid decrease

• A rapid increase