This current framework consists of three major components. The first is yield curve control, in which the Bank controls short- and long-term interest rates. Specifically, the Bank sets the short-term policy interest rate at minus 0.1 percent and purchases Japanese government bonds (JGBs) so that 10-year JGB yields remain at around 0 percent, thereby achieving accommodative financial conditions and stimulating economic activity and prices.
The second component is purchases of assets such as exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs), which are conducted with a view to exerting positive effects on economic activity and prices through lowering risk premiums such as on stocks. The third component is the commitment regarding the future conduct of monetary policy.