But if it is financed by capital inflows that are liable to dry up or be reversed, it can put the country concerned in a vulnerable position. A feature of capital flows in the new, more integrated international capital markets, is that a high proportion has been in the form of short term lending, denominated in foreign currency.
In line with this, the Bank clarified that it would purchase a necessary amount of JGBs without setting an upper limit so that 10-year JGB yields would remain at around zero percent. Coupled with the government's aggressive fiscal responses including the emergency economic measures, I expect that these monetary easing measures will enhance the effects of so-called policy mix of monetary and fiscal policies.