In this sense, raising inflation expectations is both an objective of QQE and, at the same time, the key to implementing the QQE transmission mechanism to overcome deflation. This raises the question of how people’s deflationary mindset can be changed and inflation expectations can be raised.
For firms and households with a deflationary mindset to start thinking that “from now, we will act based on the assumption that prices will rise by about 2 percent every year,” it is necessary above all that the central bank fully commits itself to achieving 2 percent inflation.