However, given that transactions have been carried out within a specific narrow price range over a prolonged period in line with the Bank's target level of 10-year JGB yields, the number of market participants, including a wide range of investors, arbitragers, and speculators, has become limited, and restrictions have been placed on the incentives for transactions.
By the end of 2020, the policy rate was cut by another 175 bps, bringing the cumulative reduction to 200 bps; from 4 percent to a record low of 2 percent. Similarly, the reserve requirement ratio (RRR) was reduced to increase the volume of loanable funds in the system.