The Bank has conducted powerful monetary easing since last spring in response to COVID-19 through the following three measures: (1) the Special Program to Support Financing in Response to the Novel Coronavirus (COVID-19) to provide support mainly for corporate financing; (2) an ample and flexible provision of funds, mainly by purchasing Japanese government bonds (JGBs) and conducting the U.S. dollar funds-supplying operations; and (3) active purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs).
Hence, in monetary policy we are practicing what we have learnt. And that is fully consistent with our price stability mandate. For now, and apparently in the medium term, the effect of the Covid-19 pandemic is disinflationary rather than inflationary. Moreover, the danger of deflation has recently re-emerged. This justifies the forceful monetary policy accommodation by the ECB, which is both proportionate and necessary.