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Bank of Japan Research Laboratory Series


The Research Laboratory Series aims to explain analyses by Bank staff on a variety of issues to a broad audience in plain language. Views expressed are those of authors and do not necessarily reflect those of the Bank.

Using Text Analysis to Gauge the Reasons for Respondents' Assessment in the Economy Watchers Survey


No.21-E-2 : December 20, 2021

The Economy Watchers Survey released monthly by the Cabinet Office provides not only the headline diffusion index of the economic assessment of survey respondents (so-called "economy watchers") but also textual data from respondents' comments giving reasons for their assessment. Employing such data, this article presents an example of …

Recent Developments in Measuring Inflation Expectations: With a Focus on Market-based Inflation Expectations and the Term Structure of Inflation Expectations


No.21-E-1 : June 25, 2021

Economic surveys and the market price of inflation-linked assets are two major sources for gauging inflation expectations. Recent studies have developed methodologies that use various indicators to estimate underlying inflation expectations and their term structure. This article reviews recent research on inflation expectations, with a focus on …

Summary of the Report of the Study Group on Legal Issues regarding Central Bank Digital Currency

Kenji Hayashi, Hiroyuki Takano, Makoto Chiba, Yasuhiro Takamoto

No.19-E-3, December 24, 2019

This article introduces the main findings of the Report of the Study Group on Legal Issues regarding Central Bank Digital Currency (CBDC). Based on four stylized models of CBDC issuance, the Report discusses what legal issues would arise within the Japanese legal framework if the Bank of Japan were to issue its own CBDC. ...

Costs and Benefits of Inflation: A Model Analysis of Japan and the U.S.

Tomohide Mineyama, Wataru Hirata, Kenji Nishizaki

No.19-E-2, July 9, 2019

Analyzing the costs and benefits of inflation has been a primary subject in monetary economics. This article presents a summary of Mineyama, Hirata, and Nishizaki (2019), which investigates the relationship between inflation and social welfare expressed as the economic satisfaction of households for Japan and the U.S. The authors' analysis. ...

Legal Responsibility in Investment Decisions Using Algorithms and AI

Makoto Chiba, Mikari Kashima, Kenta Sekiguchi

No.19-E-1, April 26, 2019

This article provides an overview of the report released by a study group on legal issues regarding financial investments using algorithms/artificial intelligence (AI). The report focuses on legal issues regarding the automated or black-boxed financial investment decisions by using algorithms/AI. ...

Missing Wage Inflation? Downward Wage Rigidity and the Natural Rate of Unemployment

Yuto Iwasaki, Ichiro Muto, Mototsugu Shintani

No.18-E-3 : September 25, 2018

In recent years, advanced economies, including Japan, have experienced a weak response of wage inflation to the decline in the unemployment rate (i.e. missing wage inflation). In this study, we investigate whether downward wage rigidity (DWR) in recession periods can be a source of this weak wage response. Specifically, we jointly estimate the degree of DWR…

Determinants of the Natural Rate of Interest in Japan -- Approaches based on a DSGE model and OG model --

Nao Sudo, Yosuke Okazaki, Yasutaka Takizuka

No.18-E-1 : June 13, 2018

Since it is not directly observable, the natural rate can only be inferred from various estimates based on different methodologies. We discuss the developments and determinants of the natural rate, and the impact of the demographic landscape on its outlook, using estimates derived from structural models by Okazaki and Sudo (2018) , and Sudo and Takizuka (2018)...

The Securities Settlement System and Distributed Ledger Technology

Kenta Sekiguchi, Makoto Chiba, Mikari Kashima

No.18-E-2 : June 5, 2018

Distributed ledger technology (DLT) is attracting wide attention because of the benefits it provides such as fault tolerance and cost reductions. When introducing DLT in securities transactions, its relationship with the Act on Book-Entry Transfer of Corporate Bonds and Shares, which regulates the transfer of paperless securities, should be examined to ensure the stability of securities settlement. ...

Structure of P2P lending and investor protection: Analyses based on an international comparison of legal arrangements

Atsushi Samitsu

No.17-E-6 : October 23, 2017

P2P lending is direct lending between lenders and borrowers online without using traditional financial intermediaries such as banks. There has been a rapid increase in the amount of outstanding loans in P2P lending in recent years, mainly in the UK, the US, and China, since a major P2P lending platform in the UK was launched in 2005. In this paper, ...

Portfolio Selection by Japanese Households: Investigation Using Japanese and US Households Questionnaire Survey

Yuichiro Ito, Yasutaka Takizuka, Shigeaki Fujiwara

No.17-E-5 : June 22, 2017

In Japan, cash and deposits continue to be the main financial assets of households. What keeps Japanese households cautious about portfolio allocations? Elucidating the mechanisms behind household behavior is an important issue in discussing the influence of monetary policy. In this study, we outline the analysis by Ito et al. (2017), who examined mechanisms that influence household portfolio selection, using...

Scope of Rules Concerning Personal Guarantee Agreements (Report of Workshops (4))

Kazutoshi Sugimura, Masaru Itatani, Masaki Bessho

No.17-E-4 : March 17, 2017

The draft legislation revising the Law of Obligations (the Civil Code) introduces a number of new rules which impose procedural requirements on the personal guarantee agreement formation process.
These new rules are desirable as people becoming guarantors without adequately considering the risks involved has been a major social problem in Japan. ...

Scope of Re-hypothecation Regulation (Report of Workshops (3))

Kazutoshi Sugimura, Masaru Itatani, Masaki Bessho

No.17-E-3 : March 15, 2017

The margin requirements for non-cleared over-the-counter ("OTC") derivatives transactions are introduced in 2016 (pursuant to an international agreement by the G20 to reduce systemic risk from OTC derivatives) and restrict the re-hypothecation of initial margin collateral. While this restriction is introduced in order to protect client assets, there has been a concern that such restriction may have a negative impact...

Banking Business and Fund Transfer Transactions: Scope of Bank Regulation (Report of Workshops (2))

Kazutoshi Sugimura, Masaru Itatani, Masaki Bessho

No.17-E-2 : March 10, 2017

In Japan, performing fund transfer transactions without a license or registration is subject to criminal sanctions. As the interpretation of the definition of fund transfer transactions has not been clearly established, there may be chilling effects on the development of innovative settlement and payment services. ...

Scope of Maximum Interest Rate Regulations (Report of Workshops (1))

Kazutoshi Sugimura, Masaru Itatani, Masaki Bessho

No.17-E-1 : March 8, 2017

Statutory provisions regulating maximum interest rates (referred to generally hereafter as "maximum interest rate regulations") employ words that are interpreted to include various payments to creditors such as "fees" in addition to "interest in substance" (i.e. "compensation for the use of principal").
Although this is considered effective in preventing evasion of regulation...

Long-Term Unemployment in Japan

Saori Naganuma, Yosuke Uno

No.16-E-1 : April 13, 2016

Japan's unemployment rate is now historically low, but long-term unemployment has been slow to decline. Long-term unemployment in Japan, unlike that in the United States, is biased towards "young adult men." This is partly because...

Quantitative and Qualitative Monetary Easing and Long-Term Interest Rates: The Effects through the Stock of "Net Supply" and Maturity Structure of Japanese Government Bonds

Ichiro Fukunaga, Naoya Kato

No.15-E-7 : December 11, 2015

The relationship between the supply-demand structure of government bond markets and long-term interest rates has been studied both theoretically and empirically, motivated by the implementation of large-scale government bond purchases by many central banks in advanced economies. Fukunaga, Kato, and Koeda (2015) examined...

Current Discussion on the Legal System regarding "Uncertificated Securities"

Atsuto Suzuki

No.15-E-6 : November 10, 2015

Though paper-based securities have been widely used, in order to avoid costs of storage and transportation -- and risks of theft and loss -- associated with the delivery of paper-based securities, recent years have seen development of the legal system in Japan with respect to rights in securities based on electronic records. In tandem with this development...

Household Inflation Expectations: The Term Structure and the Anchor Effects of Monetary Policy

Koichiro Kamada, Jouchi Nakajima

No.15-E-5 : September 30, 2015

The management of inflation expectations is one of the means by which central banks aim to achieve price stability. This is the reason why central bankers are required to have a deep understanding of the dynamics of inflation expectations. Kamada et al. (2015) examined a household survey...

What do negative inflation risk premia tell us?

Kei Imakubo, Jouchi Nakajima

No.15-E-4 : July 9, 2015

The inflation risk premium is an indicator of uncertainty about future inflation. While a positive premium on inflation risk implies more concern about the upside risk of inflation, a negative premium implies more concern about the downside risk. In Japan the inflation risk premium had...

The natural yield curve: its concept and developments in Japan

Kei Imakubo, Haruki Kojima, Jouchi Nakajima

No.15-E-3 : May 1, 2015

Recent monetary policies aiming to influence the entire yield curve have come to play a more prominent role in advanced economies as there has been little room for further lowering the short-term interest rate. This means that the effects of monetary easing cannot be fully captured by the single gap...

What Makes Post-Financial-Crisis Recoveries So Slow? An Investigation of Implications for Monetary Policy Conduct

Daisuke Ikeda, Takushi Kurozumi

No.15-E-2 : March 24, 2015

The history of financial crises, including the recent global crisis, shows that post-financial-crisis recoveries tend to be slower than usual recoveries. Against this background lie various factors, one of which is a slowdown in productivity induced by a post-crisis deterioration in firms' financing. To avoid a post-crisis slow recovery...

Detecting Financial Imbalances: Monitoring Financial Imbalances through the Financial Activity Indexes (FAIXs)

Koji Nakamura, Yuichiro Ito

No.15-E-1 : March 19, 2015

Financial imbalances such as asset price bubbles and excess credit expansions tend to lead to financial crises and associated abrupt credit crunches. To prevent such a disaster, it is important for national authorities to detect financial imbalances at an early stage. This note explains the "Financial Activity Indexes (FAIXs)," a set of indicators developed by Bank of Japan staff...

What are the Characteristics of Japan's Aggregate Wage Dynamics?: An Empirical Study on the New Keynesian Wage Phillips Curve for Japan and the US

Ichiro Muto, Kohei Shintani

No.14-E-2 : December 1, 2014

We present an empirical analysis on the New Keynesian Wage Phillips Curve (NKWPC) as derived by Gali (2011) using data for Japan and the US. NKWPC provides some theoretical insights on the relationship between wage inflation and the unemployment rate. We find that...

Central Bank Communication and the Management of Market Confidence: Two Episodes in 2013 in the U.S. and Japan

Koichiro Kamada

No.14-E-1 : December 1, 2014

Confidence has a strong influence on security prices and volatility, but has received little attention in mainstream macroeconomics. Kamada and Miura (2014) have recently revived this concept in their double-layered model of private and public information and shown how herding behavior emerges in sovereign bond markets. This article looks at two episodes...

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