Then, in 2001, the Bank introduced quantitative easing (QE), increasing monetary base to financial markets. These were path-breaking policy steps at the time, but Japan's economy nevertheless could not overcome deflation. In 2008, with conventional monetary policy measures already exhausted, Japan's economy was dealt a major blow by the global financial crisis.
At the time, with the short-term policy 3  With the introduction of negative interest rate policies, the zero lower bound no longer has a literal meaning; however, given for example the presence of banknotes, which for the central bank represent liabilities with no interest, there is a certain limit to the extent to which nominal policy interest rates can be lowered.