Undoubtedly, market improvements will lay an important groundwork for the future. Moreover, considering that the intermediary function of financial institutions is far from perfect due to such factors as the burden of NPLs, it is an important problem that is worthwhile tackling from the viewpoint of further enhancing the effect of monetary easing as well as facilitating corporate funding.
Based on this thinking, the Bank of Japan, in cooperation with market participants, has made various grass-roots efforts to improve the market by refining master transaction contracts and trading practices as well as by compiling and publishing market-related statistics. Furthermore, the Bank chose ABSs as an instrument with important monetary policy implications, and will begin purchasing them shortly.