This is designed to facilitate the formation of short- and long-term interest rates that are considered most appropriate for maintaining the momentum toward achieving the price stability target of 2 percent, taking account of developments in economic activity and prices as well as financial conditions.
At present, in the guideline for market operations, the Bank sets the short-term policy interest rate at minus 0.1 percent and the target level of the 10-year JGB yields at around 0 percent, conducting JGB purchases so as to achieve this target level. The second component is an inflation-overshooting commitment.