Keio University's Shirai on BOJ Policy Conundrum

The transcript discusses the Bank of Japan's (BOJ) potential policy changes, focusing on the 10-year yield and interest rates. It examines Japan's inflation, driven by cost-push factors like food and tourism, and the weak domestic demand. The impact of yen depreciation on local consumption and trade balance is highlighted, noting its negative effects on the Japanese economy. The BOJ's strategy to manage interest rates and its global implications are also explored, emphasizing the challenges in achieving stable inflation.

What is the potential change discussed in the BOJ's press conference?

• Removing the 0.5% difference point on the 10-year yield

• Increasing the interest rate to 2%

• Reducing the inflation target to 1%

• Introducing a new currency

What is the primary driver of Japan's current inflation?

• Increased demand for electronics

• Cost-push factors like food and tourism

• Increased government spending

• Rising housing prices

How does the depreciation of the yen affect Japanese consumers?

• It increases their purchasing power

• It leads to a trade surplus

• It has no effect on local consumption

• It lowers their purchasing power and increases costs

What is the impact of yen depreciation on Japan's trade balance?

• It improves the trade balance

• It has no impact on trade

• It results in increased exports

• It leads to a trade deficit

What dilemma is the BOJ facing regarding interest rates?

• Whether to increase the interest rate to 5%

• Reducing the inflation target to 1%

• Balancing between raising the 10-year yield and achieving 2% inflation

• Deciding on a new currency policy

What is the BOJ's commitment regarding inflation?

• Increasing inflation to 3%

• Reducing inflation to 0%

• Maintaining 2% inflation in a stable manner

• Achieving 5% inflation

What global implications might arise from the BOJ's policy changes?

• Increased global inflation

• No global implications

• Changes in global interest rates

• Impact on foreign exchange markets