To be specific, first of all, by committing to achievement of the 2 percent price stability target at the earliest possible time and announcing the continuation of a new phase of monetary easing into the future to underpin that commitment, the Bank aims to drastically change people’s expectations and raise inflation expectations.
Second, it will put strong downward pressure on nominal long-term interest rates through massive purchases of JGBs. Consequently, real interest rates could be lowered if the extent of a pick-up in nominal rates can be contained within the extent of a rise in inflation expectations.