Through secret channels and connections, Cassandra has managed to get hold of a highly confidential exemplary employment examination for entrance into the ranks of one of the world's most important financial institutions. Here it is revealed for the first time giving insight into the methods used to select some of the world's most influent bureaucrats!
** BoJ Employment Examination **
This test is intended to test your aptitude for independent thought. Please complete the entire examination
Question #1: - What, in your opinion, is the primary purpose of Central Bank Policy
(a) further the mercantile interests of Japanese businesses
(b) protect Japanese employment
(c) make sure the exchange rate doesn't rise
(d) shadow the RMB like a hawk
(e) do not upset anyone in MoF or Keidanren to insure good retirement job
(f) all of the above
Question #2 - Imagine your advising the BoJ Governor on interest rate policy. The economy is doing well. Real estate prices and the stock market are booming. Unemployment is near historically lows.
Deflation is past. Import prices are rising. What policy do you recommend to the honorable Governor?
(a) keep rates unchanged.
(b) do not raise rates
(c) urge him to make a statement saying rates will remain unchanged
(d) send SPAM mail to analysts saying rates will remain unchanged until the next ice age
(e) all the above
(warning - if you selected "other", please refrain from completing the exam and exit immediately)
Question #3 - Complete the Following Sentence as best as possible
"The Bretton Woods International Monetary System" is...
(a) to be treated with the respect accorded to Korean comfort women,
(b) only to pay lip service to so long as it serves our interests
(c) dead, and if it's not, then let's put it out of its misery,
(d) an instrument of US economic hegemony, to be fought stealthily for the day that like a phoenix we will....
(e) wonderful for Japan, so long as we disregard its spirit and central tenets
(f) all of the above
Question #4 - In public a appearances a representative of the BoJ must never:
(a) admit there is a weak yen policy
(b) say anything that might be contrary to weak YEN policy,
(c) point out that US tax receipts are about 3% of GDP too low
(d) speak poorly of Dr Sakakibara-sama
(e) never overtly disagree with any from the US FRB or US Treasury.
(f) all of the above
Question #5 - What are the prime motivations of ZIRP and nearZIRP for BoJ?
(a) keeps our currency weak for mercantile advantage
(b) insure no difficult political decisions on fiscal policy are required
(c) allow the families of BoJ Governors and employees to marry well
(d) postpone the day when the slackers day-trading FX might have to go out and find useful employment;
(e) assist the global dominance of Japanese MNCs
Question #6 - When asked about the BoJ's Accumulation of USD Reserves the correct response is
(a) "reserves?!?! what reserves?!?"
(b) "the US is the best place on earth to invest (and the women are so pretty!)"
(c) "What's with the racist Japan-bashing? PBoC, and GCCs own way more than us....."
(d) "You should direct your questions to Prof MacKinnon"
(e) "We are saving up for a retirement holiday"
(f) "We keep our friends close, and our enemies closer"
Question #7 - In advising the Governor on responses to leveraged speculators borrowing yen to fund carry trades, what advice would you give him?
(a) Encourage Japanese pension funds to invest in hedge funds to insure new equity for more leveraged carry trades
(b) The market's estimates of the carry trade are ALWAYS overestimated
(c) Advise Japanese banks and insurance companies to Sell Yen Puts. We can always rescue them with unsterilized intervention whenever we like.
(d) Start a Macro Hedge Fund themselves
(e) All of the above
Question #8 - The inflation rate is beginning to rise. What policy responses are available to the BoJ?
(a) distribute wheel-barrow vouchers to all households
(b) keep rates unchanged.
(c) do not raise rates
(d) jawbone saying rates will remain unchanged
(e) denial denial denial that inflation is incipient
Question #9 - Your trading partners are getting seriously pissed off at you. Ten YEN is dropping like a stone, even against the pathetic USD, and your bilateral surplusses with other OECD nations are soaring. What should you do?
(a) keep rates unchanged at nearZIRP
(b) conjure up the deflation boogie-man to justify current policy
(c) tell the market that "the BoJ is considering studying the possible change of policy once the preliminary implications of policy changes are evaluated"
(d) tell the market "we believe in free markets and do not wish to distort them by enacting polcies that might distort them [further]". And point out that deflation is not yet whipped.
(e) Highlight the coming demographic challenges facing Japan, and the need for lots of savings to insure their well-being, and policies that might do otherwise would be unecessarily harsh upon kind defenceless elderly people.
Question #10 - What is your opinion on Overt Official Intervention in the FX markets
(a) Highly recommended in a crisis, or nearCrisis
(b) OK, but only on Mon, Tue, Wed or Friday.
(c) Only if buying other ccy vs. YEN - never sell!
(d) Always a useful and important tool.
(e) to be used only when the market is heavily long YEN, or when the YEN is moving up, or to insure that the YEN is not moving up too fast, or to insure that the YEN doesn;t move up at all - especially during March or Sept book-closing time.
Congratulations! You are now prepared to enter the Japanese Civil Service! Please return your examinations and insure that your views NEVER deviate from those of The Team.