In addition, attention should be given to (1) the possibility of a higher risk that the Bank’s large-scale JGB purchases will be perceived as central bank financing of fiscal deficits and (2) a risk that the mechanism of maintaining fiscal discipline through interest rates will be impaired, reflecting overly heightened expectations that the stability in the JGB market will be ensured.
Furthermore, considering that there is a limit to the amount of JGBs and that the Bank cannot purchase from the market all JGBs issued, a problem regarding the sustainability of the policy of purchasing JGBs may materialize sooner or later.