Professor Ito Says BOJ Will Keep Yield Near Zero

The transcript discusses the Bank of Japan's bond buying program and its expected reduction from 80 trillion yen to 60 trillion yen, and eventually to 40 trillion yen. It explains the concept of yield curve control, where the market determines the amount of bonds purchased based on price, making the process endogenous. The discussion clarifies that this is not tapering, as the focus is on maintaining the yield curve rather than the quantity of bonds purchased.

What is the current consensus regarding the Bank of Japan's bond-buying program?

• It will remain at 80 trillion yen indefinitely.

• It will be completely stopped immediately.

• It will increase to 100 trillion yen.

• It will be reduced to 60 trillion yen.

What does 'endogenous' mean in the context of the Bank of Japan's bond purchases?

• The amount is fixed and unchangeable.

• The amount is decided by international consensus.

• The market determines the amount based on price.

• The government sets the amount to be purchased.

How does the Bank of Japan plan to maintain the yield at zero?

• By buying a fixed amount of bonds every month.

• By adjusting purchases based on market conditions.

• By increasing interest rates.

• By selling bonds to the market.

Why do some people mistakenly call the Bank of Japan's actions 'tapering'?

• Because they are raising interest rates.

• Because they are stopping all bond purchases.

• Because they are reducing bond purchases like the Fed did.

• Because they are increasing bond purchases.

What is the primary focus of the Bank of Japan's monetary policy according to the final section?

• The total amount of bonds purchased.

• The inflation rate.

• The exchange rate of the yen.

• The yield curve and interest rates.