There is no doubt that a clear commitment to the price stability target of 2 percent and large-scale monetary easing that underpinned this commitment under QQE have been very effective for Japan’s economy to move toward getting out of deflation. That said, the price stability target of 2 percent has not been achieved yet, despite unprecedentedly large-scale monetary easing.
With this in mind, we would like to re-examine the transmission mechanism of policy effects and possible factors that may have hampered this mechanism. In addition, “QQE with a Negative Interest Rate,” which was introduced in January 2016, has already exerted substantial downward effects on interest rates through a combination of the negative policy rate and JGB purchases.