QQE aims to exert downward pressure on nominal and real long-term interest rates through a range of transmission channels, thereby lowering funding costs as well as raising asset prices. Ultimately, these changes are expected to boost the aggregate demand of firms and households, and raise the rate of inflation toward around 2 percent.
Given that JGB purchases are the main instrument under QQE, I will briefly discuss the transmission channels with a focus on JGB purchases. To simplify the discussion, let me categorize the transmission channels into three types.