However, in that case, the Bank would become the only buyer of JGBs, which would likely give rise to a concern over the Bank’s purchases being perceived as financing the fiscal deficit, as well as to a further decline in market functioning.
Regarding the second factor, whether or not demand from final investors will decrease depends in part on their future stance on JGB purchases. For example, a reduction in life insurance companies’ promised return for some insurance products that will start from July 2015 might affect investors’ future behavior (Chart 18).