Sony Financial Says BOJ Won't Reach 2% Target by 2019

The video discusses Japan's struggle to achieve a 2% inflation rate, highlighting the unrealistic nature of this goal due to its correlation with wage rate hikes. The central bank's credibility is questioned as timelines have been extended multiple times. The dominance of the central bank in the market poses risks, as achieving the inflation target could lead to market disappearance, affecting the ability to buy government bonds.

Why is achieving 2% inflation in Japan by 2019 considered unrealistic?

• Because of slow wage rate increases

• Because inflation is already above 2%

• Due to high consumer spending

• Due to rapid wage rate hikes

What is a potential risk for the government if they admit the long-term nature of achieving the inflation target?

• Increased public trust

• Loss of central bank credibility

• Immediate economic growth

• Higher foreign investments

What has the Bank of Japan done in response to the lack of progress towards the inflation target?

• Stopped buying government bonds

• Reduced government spending

• Implemented yield curve control

• Increased interest rates

How has the Bank of Japan's credibility been affected by the repeated timeline extensions?

• It has strengthened

• It remains unchanged

• It has improved slightly

• It has weakened

What is a potential consequence of the Bank of Japan's dominance in the market?

• Disappearance of the market

• Increased market competition

• Lower unemployment rates

• Higher inflation rates