First program: asset purchase program  The two stages of the transmission mechanism of monetary easing Let me now move on to the Bank of Japan’s conduct of monetary policy. The Bank recognizes that Japan’s economy faces the critical challenge of overcoming deflation as early as possible and returning to a sustainable growth path with price stability.
Based on this recognition, the Bank has been pursuing aggressive monetary easing. The transmission of monetary easing can be divided into two stages. The first stage is the transmission of monetary easing effects from the realm of monetary policy to the financial environment in which firms and households can raise sufficient funds at low interest rates.