Households also anticipate conditions following the economy’s overcoming of deflation; this is evidenced by the increase in the proportion of fixed-rate mortgages compared to the previously dominant floating-rate mortgages. These dynamics show that the economy and financial markets are currently seeking a new equilibrium point. Only three months have elapsed since the Bank introduced QQE.
The Bank’s previous monetary policy was sometimes questioned by other countries, which later revised their judgments after experiencing a situation similar to that faced by Japan after the bubble economy burst in the 1990s. It might therefore be premature to assess the effectiveness of QQE solely from the money market reaction since early April.