Having opened up the possibility that policy rates can turn negative has also contributed to flattening the whole yield curve, by removing the upward bias to yields that came from the perception that rates could only go up, not down. Indeed, we have stated unambiguously that policy rates would remain at current levels or lower for an extended period of time.
Second, our asset purchases help us further lower yields across maturities and asset classes by compressing risk premia in the markets where we intervene. That in turn triggers portfolio rebalancing out of those markets and brings down borrowing costs across the whole constellation of rates, thereby producing broad stimulating effect.