Second, the Bank purchases treasury discount bills (T-Bills) and other assets, in addition to JGBs, to meet the monetary base target.6 Moreover, it regularly conducts fixed-rate fundssupplying operations (with a duration of mainly three months, but available up to one year). Therefore, these short-term operations exert downward pressure directly on short-term interest rates.
Regarding the first risk, it is not assessed at present that price cuts that aim at stimulating demand have been observed widely, since one of the reasons for the current decrease in demand due to constrained economic activity is vigilance against COVID-19.