Who would have thought some years ago that pensions funds and insurance companies would become participants in the market for risk of default of other firms? On the other hand, hedge funds manage nowadays five times more assets than in 1998 and are involved in less liquid markets.
The Bank conducts its monetary policy through market operations – providing funds to, and/or absorbing them from, financial markets on a daily basis. At the same time, as part of its objective of supplying ample funds, the Bank purchases 21.6 trillion yen worth of JGBs a year so as to reduce the burden of day-to-day short-term operations by steadily supplying long-term funds.