In combination with large-scale purchases of JGBs, the Bank can exert even stronger downward pressure on interest rates across the entire yield curve, resulting in lower real interest rates. Some argue that the negative interest rate policy has shifted the Bank’s policy focus from the quantitative to the interest rate aspect. This is not the case.
Rather, “QQE with a Negative Interest Rate” further boosts the effects of existing policy measures by directly pushing down the short-end of the yield curve. In this sense, it can be called “enhanced QQE.” As I mentioned earlier, in the debate on monetary policy, the zero lower bound on nominal interest rates has traditionally been regarded as insurmountable.