In addition to such side effects, my concern is the possibility of impairing the sustainability and stability of the Bank's JGB purchases, which are the core of QQE. Many financial institutions – regional banks in particular – are said to have a strong tendency to hold JGBs with the aim of obtaining stable income gains rather than having temporary capital gains.
For these financial institutions, if the levels of interest rates applied to excess reserve balances of their current accounts at the Bank become lower relative to yields on their current JGB holdings, or if yields on reinvested JGBs decline, this could reduce their incentive for selling JGBs to the Bank.