Based on the discussion at the MPM, the Policy Board members concluded that it was not necessary at that time for the Bank to extend the maximum duration of loans provided through its funds-supplying operations against pooled collateral, because (1) the effect of compressing risk premiums driven by the Bank’s massive JGB purchases was likely to strengthen steadily, and (2) flexible conduct of market operations was sufficiently ensured under the current guideline for the operations to contain the volatility.
In other words, the current policy guideline allows a range of “about six to eight years” for the average remaining maturity of the Bank’s JGB purchases. By utilizing this guideline, it would be possible to stabilize the entire yield curve by purchasing JGBs with a maturity of one to five years more intensively.