The second observation is that, even though the forward guidance provided by the Bank of Japan has been much more forceful than that by other central banks, the rise in inflation expectations in Japan has only been moderate.
The phenomenon that economic indicators such as inflation expectations seem to respond more moderately to central bank forward guidance than theory predicts has been labelled the "forward guidance puzzle," which has also been the subject of academic debate.8 In Japan's case, analysis of recent developments shows that inflation expectations are susceptible to "negative price shocks.