The Effects of the Bank of Japan's Zero Interest Rate Commitment and Quantitative Monetary Easing on the Yield Curve: A Macro-Finance Approach (subsequently published in "The Japanese Economic Review", September 2007, Vol. 58, No. 3, 303-328)

This paper provides an empirical investigation of monetary policy in Japan in the zero interest rate environment that has held sway since 1999. In particular, we focus on the effects of the zero interest rate commitment and of quantitative monetary easing on mediumto long-term interest rates in Japan. In the study we apply a version of the macro-finance approach, involving a combination of estimation of a structural macro-model and calibration of time-variant parameters to the yield curve observed in the market. This enables us to decompose interest rates into expectations and risk premium components and simultaneously to extract the market's perception of the Bank of Japan's (BOJ's) willingness to carry on its zero interest rate policy. In the analysis we make clear the counterfactual policy that would have been practiced in the absence of the actual policies followed by the BOJ since 1999. From this analysis, we tentatively conclude that the BOJ's monetary policy since 1999 has functioned mainly through the zero interest rate commitment, which has led to declines in medium- to long-term interest rates. We also find some evidence that, up until the end of 2003, raising the reserve target may have been perceived as a signal indicating the BOJ's accommodative policy stance although the size of the effect is not large. The portfolio rebalancing effect -- either by the BOJ's supplying ample liquidity or by its purchases of long-term government bonds -- has not been found to be significant.

"The Effects of the Bank of Japan's Zero Interest Rate Commitment and Quantitative Monetary Easing on the Yield Curve: A Macro-Finance Approach"

This paper provides an empirical investigation of monetary policy in Japan in the zero interest rate environment that has held sway since 1999. In particular, we focus on the effects of the zero interest rate commitment and of quantitative monetary easing on mediumto long-term interest rates in Japan. In the study we apply a version of the macro-finance approach, involving a combination of estimation of a structural macro-model and calibration of time-variant parameters to the yield curve observed in the market. This enables us to decompose interest rates into expectations and risk premium components and simultaneously to extract the market's perception of the Bank of Japan's (BOJ's) willingness to carry on its zero interest rate policy. In the analysis we make clear the counterfactual policy that would have been practiced in the absence of the actual policies followed by the BOJ since 1999. From this analysis, we tentatively conclude that the BOJ's monetary policy since 1999 has functioned mainly through the zero interest rate commitment, which has led to declines in medium- to long-term interest rates. We also find some evidence that, up until the end of 2003, raising the reserve target may have been perceived as a signal indicating the BOJ's accommodative policy stance although the size of the effect is not large. The portfolio rebalancing effect -- either by the BOJ's supplying ample liquidity or by its purchases of long-term government bonds -- has not been found to be significant.

Single Nuclear Spin Cavity QED

We constructed a cavity QED system with a diamagnetic atom of 171Yb and performed projective measurements on a single nuclear spin. Since Yb has no electronic spin and has 1/2 nuclear spin, the procedure of spin polarization and state verification can be dramatically simplified compared with the pseudo spin-1/2 system. By enhancing the photon emission rate of the 1S0-3P1 transition, projective measurement is implemented for an atom with the measurement time of T_meas = 30us. Unwanted spin flip as well as dark counts of the detector lead to systematic error when the present technique is applied for the determination of diagonal elements of an unknown spin state, which is delta|beta|^2 < 2 * 10^-2. Fast measurement on a long-lived qubit is key to the realization of large-scale one-way quantum computing.Comment: 5 pages, 5 figure

Japan's Deflation, Problems in the Financial System, and Monetary Policy

This paper offers three analyses of Japan's macroeconomic experience during the post-1990 period. First, we analyze various facets of deflation during the period, arguing that the deflation of general prices has by no means been a major factor for the stagnating economy. In contrast, the deflation of asset prices was closely related to the economic difficulty of the period. In particular, the negative shocks generated by sharp declines in asset prices in the early 1990s have been propagated and amplified by their interaction with the deterioration in the condition of the financial system. Some statistical evidence supports this view. Second, we analyze the effects of monetary policy adopted by the Bank of Japan (BOJ) to fight deflation since the late 1990s. Given that short-term interest rates were already nearly zero in the mid-1990s, policy measures have focused on creating monetary easing effects beyond those created by zero interest rates alone. We show that the zero interest rate policy, which includes a commitment to maintain a zero interest rate for a longer period than that suggested by a baseline monetary policy rule, has produced strong effects on expected future short-term interest rates and thus the entire yield curve. Third, we argue that the BOJ has successfully prevented a repetition of the 1997-98 type liquidity crisis by directing market operations at addressing the financial-sector problems. These operations have taken the form of containing risk and liquidity premiums, particularly in the money market, through proactive provision of liquidity as well as the BOJ's own risk- taking activity.

Observation of asymmetric electromagnetic field profiles in chiral metamaterials

We experimentally observe asymmetric electromagnetic field profiles along two-dimensional chiral metamaterials. The asymmetric field profiles depending on the chirality and the operation frequency have been reproduced well by the numerical simulation. Around a chiral meta-atom, distribution of a Poynting vector is found to be shifted asymmetrically. These results are explained in terms of an analogy with the side-jump mechanism in the electronic anomalous Hall systems

Faraday Rotation with Single Nuclear Spin Qubit in a High-Finesse Optical Cavity

When an off-resonant light field is coupled with atomic spins, its polarization can rotate depending on the direction of the spins via a Faraday rotation which has been used for monitoring and controlling the atomic spins. We observed Faraday rotation by an angle of more than 10 degrees for a single 1/2 nuclear spin of 171Yb atom in a high-finesse optical cavity. By employing the coupling between the single nuclear spin and a photon, we have also demonstrated that the spin can be projected or weakly measured through the projection of the transmitted single ancillary photon.Comment: 6 pages, 6 figure