Moreover, in order to avoid a possible arousal of doubt regarding the Bank’s increasing purchases of JGBs as financing fiscal deficits, it is vital for the government to clearly show the future course of fiscal consolidation and steadily make progress to reform the fiscal structure.
On this point, the government – in the joint statement released with the Bank in January – stated that “in strengthening coordination between the Government and the Bank of Japan, the Government will steadily promote measures aimed at establishing a sustainable fiscal structure with a view to ensuring the credibility of fiscal management.” We strongly expect the government to move on that front.