Since “quantity” and “interest rate” are generally determined simultaneously, my understanding is that it is difficult to conduct smooth money market operations while setting explicit targets for both dimensions. When the interest rate dimension is to be controlled, control over the quantity dimension could be lost.
Therefore, the Bank’s new policy framework can be explained as having taken this point into consideration, and non-rigid targets have been set on both the quantity and interest rate dimensions — indicating that an annual pace of increase in the amount outstanding of the Bank’s JGB holdings should be “about” 80 trillion yen, and the target level of 10-year JGB yields is set at “around” zero percent.