20  BIS central bankers’ speeches  Chart 8 Factors affecting long-term interest rates  JGB purchases by the Bank of Japan  Long-term  =  interest rates  +  Risk premia  Expected path of short-term interest rates  Liquidity of the JGB market,  Improvement in the economic outlook,  fiscal sustainability,  medium- to long-term inflation expectations  etc…  (monetary base targeting), etc…  Chart 9 Expansion in the monetary base and JGB purchases 300  tril.
yen End-2014 270 tril. yen  Monetary base 250  End-2013 200 tril. yen  JGB holdings  End-2014 190 tril. yen  200 End-2012 138 tril. yen  150  End-2013 140 tril. yen  100  End-2012 89 tril.