For his part, the central bank chief is walking a tightrope. He has conceded his much vaunted original 2-year timeframe will be missed due to inflation, but clearly also feels like he cannot give the government any scope to relax on their medium-term fiscal consolidation plan, as this was an explicit precondition for the conduct and support of extraordinary monetary easing in the first place. It warrants some 3-month vol premium on yen assets and a particularly close following of domestic data and news in the interim. Both mark a sharp shift from what was always likely to be a very quiet 4 or 5 months following last December's election. 100 80 60 40 2 0 C1 85 90 95 00 03 10 —2% -1% 0% 1% — 2% http://www.boi.or.ip/en/mopo/outlook/gor1504a.pdf http://www.boi.or.ip/en/research/wps rev/rev 2015/data/rev15e03.pdf https://www.boi.or.ip/en/research/wps rev/wps 2015/data/wp15e03.pdf 3% This communication may contain confidential and/or privileged information. If you are not the intended recipient (or have received this communication in error) please notify the sender immediately and destroy this communication. Any unauthorized copying, disclosure or distribution of the material in this communication is strictly forbidden. Deutsche Bank does not render legal or tax advice, and the information contained in this communication should not be regarded as such. please note The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE Unauthorized use, disclosure or copying of this CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0 116827 CONFIDENTIAL SDNY_GM_00263011 EFTA01457323