BNP's Saywell: Fed Hikes Empower BOJ Dovishness

The video discusses Governor Kuroda's monetary policy in 2016, highlighting how external factors like the Fed's actions influenced the dollar-yen exchange rate. It explores the concept of policy divergence and its impact on markets, particularly focusing on the implications of capping the 10-year yield. The analysis also covers the spread between US Treasuries and Japanese Government Bonds (JGBs), predicting future trends and their potential effects on the foreign exchange market.

What was a significant factor that influenced the dollar-yen exchange rate in 2016?

• Governor Kuroda's policy decisions

• The US Federal Reserve's actions

• Trade agreements between the US and Japan

• Japan's domestic economic growth

How does policy divergence affect Japanese monetary policy according to the discussion?

• It leads to increased inflation in Japan

• It strengthens Japanese monetary policy

• It has no effect on Japanese monetary policy

• It weakens Japanese monetary policy

What is the concern if the Bank of Japan starts selling JGBs?

• It could lead to a stronger yen

• It could cause a trade war

• It might be seen as loosening policy

• It might be seen as tightening policy

What is the predicted trend for the spread between US Treasuries and Japanese bonds?

• The spread will fluctuate unpredictably

• The spread will decrease

• The spread will remain stable

• The spread will increase

What is the base assumption regarding trade wars in the analysis?

• Trade wars will benefit Japan

• There will be no trade wars

• Trade wars will have no impact

• Trade wars will escalate