During the first several years of Mr. Takahashi in office, the Bank was able to sell most of the underwritten government bonds in the secondary market promptly. The amount of the Bank’s holding of government securities did not grow significantly, hence the monetary base did not, either. By contrast, we now have well-developed primary government securities markets.
Even after the recent earthquake, the government is able to issue its securities in the market smoothly, and the bid-to-cover ratios in the primary markets remain unchanged. Although some commentators mention a sharp depreciation of the Japanese exchange rate in the early 1930s, the exchange rate regime at that time was quite different.