BofAML Says Japan's Domestic Demand to Accelerate

The video discusses the economic outlook for Japan in 2018, highlighting optimism for global growth at 3.8%, which should benefit Japan's exports. Domestic demand, particularly CapEx, is expected to accelerate, supporting economic expansion. Inflation remains below the 2% target, but a gradual increase is anticipated, driven by wage growth and FX tailwinds. The Bank of Japan may adjust its yield target in late 2018. The disconnect between strong global growth and inflation is noted as a global issue, with the Phillips curve still relevant.

What is the projected global growth rate for 2018, and how is it expected to affect Japan?

• 3.8% growth, boosting Japan's exports and domestic demand

• 2.5% growth, leading to a decline in Japan's exports

• 4.5% growth, causing inflation in Japan

• 3.0% growth, with no impact on Japan's economy

What is the expected trend for Japan's inflation, and what factors are contributing to it?

• Inflation is expected to decrease due to lower energy prices

• Inflation is expected to accelerate due to stronger wage growth and FX tailwinds

• Inflation will remain stable due to government intervention

• Inflation will rise sharply due to increased import costs

What policy action might the Bank of Japan take in 2018 regarding its ten-year yield target?

• Eliminate the yield target to focus on other measures

• Lift the yield target around the third quarter

• Maintain the current yield target to ensure stability

• Lower the yield target to stimulate the economy

What is the global phenomenon discussed in relation to strong growth and inflation?

• The Phillips curve is irrelevant in modern economics

• There is a disconnect between strong growth and inflation

• Inflation always follows strong economic growth

• Global growth has no impact on inflation

What is the anticipated change in Japan's inflation dynamics?

• Inflation will decrease due to external pressures

• Inflation is expected to change due to idiosyncratic factors

• Inflation will remain suppressed indefinitely

• Inflation will stabilize at current levels