In fact, I think that even before the implementation of comprehensive monetary easing, a lowering of longer-term interest rates had already been achieved to a substantial extent through the Bank’s lowering of the policy interest rate to 0.1 percent, through policy duration effects from previous policies, and through the provision of ample funds.
Therefore, I felt that increasing the purchase of government securities to achieve a further decline in longer-term interest rates would only have limited positive effects18 and would increase the risk of overheating in the bond market; moreover, excessively low interest rates could deprive financial institutions of profit opportunities and instead hamper the effects of monetary easing, so that any positive effects might be outweighed by the potential negative side effects.