At the same time, in the making of monetary policy, it is important to maintain the market’s confidence that a central bank conducts its policy with the aim of achieving sustainable growth with price stability. In that context, let me emphasize that the Bank of Japan’s purchase of government bonds will never be intended to be construed as financing government debt.
In terms of improving the fiscal balance, one often hears the view that raising the nominal growth rate is important. I find this to be rather misleading. Whether or not the fiscal balance improves rests heavily on how the rise in nominal growth rate is achieved.