III. Transmission mechanism of QQE for economic recovery  Thus far, I have shown that QQE has helped Japan’s economy recover, albeit at a moderate pace. Now, I would like to discuss the mechanism through which this has been achieved. QQE has been effective in reducing real interest rates by lowering long-term interest rates and raising inflation expectations.
When the integrity of the euro area was under threat, so too was global prosperity. Christine Lagarde, who has chaired many IMF gatherings where the first topic under discussion was the euro area, can testify to that. By the same token, the return of the euro area economy to sustained growth, under the impulse of our monetary policy, is good news for everybody, everywhere.