S&P's Gruenwald Sees BOJ Staying the Course

The video discusses the Bank of Japan's (BOJ) current monetary policy, focusing on its efforts to achieve a 2% inflation target. Despite positive core inflation for three years, the BOJ maintains its course due to Japan's unique economic challenges, including a tight labor market and low wage pressure. The BOJ's strategy involves influencing inflation expectations, which are historically backward-looking due to decades of deflation. The discussion highlights the need for a long-term approach to re-anchor these expectations and the impact of Japan's economic performance on this goal.

What is the current core inflation measure mentioned in the text?

What is the medium-term inflation target set by the BOJ?

How long has Japan experienced positive core inflation according to the discussion?

Discuss the significance of the output gap in the context of Japan's economy.

What challenges does the BOJ face in changing inflation expectations?