This framework consists of two main components. One of the two is yield curve control, whereby the Bank facilitates the formation of shortand long-term interest rates that are considered most appropriate in light of the 2 percent price stability target.
In the Bank's current guideline for market operations, the short-term policy interest rate is set at minus 0.1 percent and the target level for yields on 10-year Japanese government bonds (JGBs) is set at around 0 percent. This is intended to support proactive economic activities by Japanese firms and households through maintaining highly accommodative financial conditions. The other main component is the inflation-overshooting commitment.