Second, the Bank must have a sufficiently liquid asset portfolio to flexibly inject or withdraw funds as necessary. I believe that the Bank’s balance sheet has also attracted growing attention in other countries. Some observers have expressed concern over the expansion of the Bank’s balance sheet as a sign of deterioration in its assets.
However, with the Bank’s introduction of the negative interest rate, a large part of the yield curve has declined by about 0.2 percentage points, which is close to the decline in short-term yields, or more (Chart 4). This means that the extent of the decline in interest rates brought about by the negative interest rate policy is quite substantial.