Outlook for Economic Activity and Prices (Outlook Report) "The Bank's View" in the Outlook Report will be released immediately after relevant MPMs, and the full text at 2:00 p.m. on the next business day. Summary of Opinions It will be released at 8:50 a.m. MPM Minutes It will be released at 8:50 a.m.

Welcome to "BOJ from Home." Through this online tour, we offer you a 3-D/virtual reality (VR) viewing experience as you explore the new tour route of the Bank of Japan's Head Office (designated as an Important Cultural Property).

The interior of the Bank's Main Building can be viewed in 3-D on any PC or mobile device.

You can also enjoy an immersive virtual reality experience using VR goggles or glasses.

We make an empirical analysis of whether and how variance risk premia (VRP) contribute to predicting excess stock returns in the US and Japan. Our new findings to be added to the literature are that (i) the correlation between VRP and future excess returns in the US is insignificant when the risk-free rate is close to zero, and (ii) the correlation in Japan is significantly negative. To explain these findings, we also conduct a preliminary theoretical analysis with a structural model of asset pricing based on two assumptions: the zero lower bound (ZLB) for the risk-free rate, and a negative correlation between the consumption growth rate and the volatility-of-volatility. These allow excess returns to follow a hump-shaped pattern. This affects the sign and significance of the correlation of the returns with the VRP.

Keywords: Excess returns; Heterogeneous autoregressive model; Nikkei 225; Realized volatility; S&P500; Variance risk premium; Zero lower bound

This report summarizes the reports from all regional research divisions, mainly at the Bank's branches in Japan, and is based on data and other information gathered for the meeting of general managers of the Bank's branches held today. The English translation is based on the Japanese original.

Survey period : From May 8 to June 3, 2020. Population of the Survey : Individuals living in Japan who are at least 20 years of age. Sample size : 4,000 people (2,423 people [i.e., 60.6 percent of the overall sample size] provided valid responses to questions). Sampling method : Stratified two-stage random sampling method. Survey methodology : Questionnaire survey (mail survey method).