Columbia University's Ito on BOJ Policy

The transcript discusses the Bank of Japan's (BOJ) meeting and its approach to inflation expectations. It highlights that any policy change is tied to inflation forecasts, which are updated quarterly. The current forecast remains at 1.8% for 2023, despite inflation being above 2%. The BOJ is expected to raise its inflation outlook in July, potentially leading to policy normalization. The impact of wage negotiations on inflation expectations is also discussed, with a focus on the BOJ's policy instruments and future moves.

What does the text suggest about the relationship between wage hikes and inflation expectations?

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What are the three policy instruments mentioned that the BOJ has at its disposal?

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What is the main concern regarding premature tightening as discussed in the text?

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