If the conduct of monetary policy, which controls the ordinary policy interest rate (the uncollateralized overnight call rate in the case of Japan) is defined as “traditional monetary policy,” monetary policy that is pursued while the policy interest rate approaches the zero bound is often called “unconventional monetary policy.” When the policy interest rate is lowered to around 0 percent, it becomes difficult to further enhance monetary easing.
Instead, there are other policy measures to further exert powerful monetary easing effects, such as committing to continue the zero interest rate policy into the future or increasing the size of a central bank’s assets, or changing the composition of its asset portfolio.